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Does the Expansion of Public Long‐Term Care Funding Affect Saving Behaviour?

Author

Listed:
  • Joan Costa‐Font
  • Edward C. Norton
  • Luigi Siciliani
  • Joan Costa‐Font
  • Cristina Vilaplana‐Prieto

Abstract

The effect of further public caregiving subsidies (and insurance expansions to cover long-term care) on savings and saving behaviour is far from clear. In this paper we take advantage of a policy intervention to study the effect on savings and savings behaviour of the progressive introduction of a universal public long-term care subsidy (Sistema para la Autonomía y Atención a la Dependencia, SAAD) from 2007 in Spain. We draw on a difference-in-difference strategy (DID) to show a contraction of savings after the policy intervention, but only among younguer elders who receive primarily cash benefits (unconditional caregiving allowance) as opposed to home help (ammouting 13-38% of the allowance). Saving reductions of individuals in the second and third quintile of income distribution, those without children and those residing in regions that implemented the reform earlier, drive the effect.
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Suggested Citation

  • Joan Costa‐Font & Edward C. Norton & Luigi Siciliani & Joan Costa‐Font & Cristina Vilaplana‐Prieto, 2017. "Does the Expansion of Public Long‐Term Care Funding Affect Saving Behaviour?," Fiscal Studies, Institute for Fiscal Studies, vol. 38, pages 417-443, September.
    • Handle: RePEc:ifs:fistud:v:38:y:2017:i::p:417-443
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    Cited by:

    1. Lin, Lin & He, Min & Nie, Peng, 2025. "Direct and spillover effects of long-term care insurance on Chinese elderly frailty," The Journal of the Economics of Ageing, Elsevier, vol. 31(C).
    2. Costa-Font, Joan & Vilaplana-Prieto, Cristina, 2022. "Mental health effects of caregivers respite: Subsidies or Supports?," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    3. Joan Costa-Font & Sergi Jimenez-Martin & Cristina Vilaplana-Prieto & Analía Viola, 2023. "Universalizing the Access to Long-term Care: Evidence from Spain," NBER Working Papers 31825, National Bureau of Economic Research, Inc.
    4. He, Min & Lin, Lin, 2024. "China’s public long-term care insurance and risky asset allocation among elderly households," The Journal of the Economics of Ageing, Elsevier, vol. 29(C).
    5. Joan Costa-Font & Sergi Jiménez & Cristina Vilaplana Prieto & Analía Viola, 2022. "Long-term Care in Spain," Studies on the Spanish Economy eee2022-23, FEDEA.
    6. Fabiani, Beatrice & Costa-Font, Joan & Aranco, Natalia & Stampini, Marco & Ibarrarán, Pablo, 2025. "Funding options for long-term care services in Latin America and the Caribbean," LSE Research Online Documents on Economics 127121, London School of Economics and Political Science, LSE Library.
    7. Costa-Font, Joan & Jiménez-Martín, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?," Journal of Health Economics, Elsevier, vol. 84(C).
    8. Joan Costa-Font, 2023. "How to support adult caregivers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 510-510, June.
    9. Joan Costa‐Font & Cristina Vilaplana‐Prieto, 2025. "The Hidden Value of Adult Informal Care in Europe," Health Economics, John Wiley & Sons, Ltd., vol. 34(4), pages 791-812, April.
    10. Fabiani de Leva, Beatrice & Costa-Font, Joan & Aranco, Natalia & Stampini, Marco & Ibarrarán, Pablo, 2025. "Funding options for long-term care services in Latin America and the Caribbean☆," The Journal of the Economics of Ageing, Elsevier, vol. 30(C).
    11. Costa-Font, Joan, 2017. "“Institutionalization aversion” and the willingness to pay for home health care," Journal of Housing Economics, Elsevier, vol. 38(C), pages 62-69.

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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