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The Ability to Pay for Long-Term Care in the Netherlands: A Life-cycle Perspective

Listed author(s):
  • Arjen Hussem

    ()

    (PGGM)

  • Casper Ewijk

    ()

    (University of Amsterdam)

  • Harry Rele

    ()

    (CPB Netherlands Bureau of Economic Policy Analysis)

  • Albert Wong

    ()

    (National Institute for Public Health and the Environment)

Abstract This paper uses synthetic life-cycle paths at the individual level to analyze the distribution of long-term care expenditures in the Netherlands. Using a comprehensive set of administrative data 20,000 synthetic life-cycle paths of household income and long-term care costs are constructed using the nearest neighbor resampling method. We show that the distribution of these costs is less skewed when measured over the life-cycle than on a cross-sectional basis. This may provide an argument for self-insurance by smoothing these costs over the life-cycle. Yet costs are concentrated at older ages, which limits the scope for self-insurance. Furthermore, the paper investigates the relation between long-term care expenditures, household composition, and income over the life-cycle. The expenditures on a lifetime basis from the age of 65 are higher for low income households, and (single) women.

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File URL: http://link.springer.com/10.1007/s10645-016-9270-7
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Article provided by Springer in its journal De Economist.

Volume (Year): 164 (2016)
Issue (Month): 2 (June)
Pages: 209-234

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Handle: RePEc:kap:decono:v:164:y:2016:i:2:d:10.1007_s10645-016-9270-7
DOI: 10.1007/s10645-016-9270-7
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/journal/10645/PS2

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