[Seminaire CREM] Non-profit and For-profit Competition: Evidence from Home Care

Non-profit and For-profit Competition: Evidence from Home Care

This paper provides novel evidence of the impact of competition between ownership structures in home care services for dependent individuals. The French 2005 law that led to the historical removal of for-profit barriers to entry constitutes a quasi-natural experiment. The difference-in-difference estimations indicate a negative effect of competition on the level of employment, driven by non-profit organizations. These results are consistent with firm-output maximization theories in which non-profits are expected to reduce their less profitable activities when facing competition and behave more like for-profit organizations. Additionally, the impact on hourly wages and hours worked is negative and persistent over time, which may further reduce the attractiveness of this type of high-demand job.