Reforming Consumer Directed Care in Germany: A Woodwork Effect?

This paper evaluates the incidence and extent of support as well as the remuneration of formal and informal caregivers for recipients of a professionally assisted consumer-directed program, a personal budget, compared to recipients of standard types of home care benefits of the German long-term care insurance, i.e. agency services and cash payments. The evaluation makes use of a long-run social experiment at seven dierent sites in Germany with a random assignment into a treatment group of personal budget recipients and a control group of standard benefit recipients. Despite the experimental design, we have to deal with selection problems stemming from non- random assignment and non-random panel attrition. Hence, we apply a dierence-in-dier ences estimator taking account of the non-random nature of panel attrition. The results show that personal budgets could be cost ecient compared to agency services, but are likely to be cost inecient compared to cash payments.