The Rise in Old Age Longevity and the Market for Long-Term Care
AbstractThis paper analyzes how markets for old-age care respond to the aging of populations. We consider how the biological forces, which govern the stocks of frail and healthy persons in a population, interacct with economic forces, which govern the demand and suppoly for labor-intensive care. Many economists have argued that aging will raise the market demand for long-term care, and hence price and quantity through classic market effects. We argue that the direct effect of aging is to lower the demand for market care by incresing the supply of home production. By influencing the length of frail lifetimes, aging may also have a further indirect demand effect, which may reinforce or counteract the direct negative demand effect. By providing healthy spouses, the marriage market provides care-givers for home production of long-term care; therefore, growth in old-age longevity may lower the demand for market production. Growth of elderly males serves to contract the long-term care market becuase it eases the scarcity of men in the old-age marriage market; growth of females serves to expand market care because it worsens the scarcity of men. These predictions lend themselves to an interpretation of the rapid deceleration in output growth that has taken place in the US over the last two decades, despite a constant rate of longevity growth and enormous growth in demand subsidies: since growth in elderly males has risen dramatically relative to growth in elderly females, the rate of long-term care growth has slowed significantly. We test our predictions empirically using state- and county-level evidence on the US market for long-term care in nursing homes over the last three decades. The evidence provides support for our predictions concerning the response in output growth to aging and the contraction of output due to the aging of males.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Chicago - Center for Study of Economy and State in its series University of Chicago - George G. Stigler Center for Study of Economy and State with number 146.
Date of creation: 1998
Date of revision:
Contact details of provider:
Postal: UNIVERSITY OF CHICAGO, CENTER FOR STUDY OF THE ECONOMY AND THE STATE, 1101 E. 58TH STREET CHICAGO ILLINOIS 60637.
Web page: http://research.chicagobooth.edu/economy/
More information through EDIRC
Other versions of this item:
- Darius Lakdawalla & Tomas Philipson, 2002. "The Rise in Old-Age Longevity and the Market for Long-Term Care," American Economic Review, American Economic Association, vol. 92(1), pages 295-306, March.
- Darius Lakdawalla & Tomas Philipson, 1998. "The Rise in Old Age Longevity and the Market for Long-Term Care," NBER Working Papers 6547, National Bureau of Economic Research, Inc.
- I1 - Health, Education, and Welfare - - Health
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Axel Borsch-Supan & Laurence J. Kotlikoff & John N. Morris, 1988. "The Dynamics of Living Arrangements of the Elderly," NBER Working Papers 2787, National Bureau of Economic Research, Inc.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- L'analyse Ã©conomique ne se limite pas au seul marchÃ©
by email@example.com (Bertrand Achou) in BS Initiative on 2014-08-20 07:19:23
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.