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

Author

Listed:
  • 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

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.

Suggested Citation

  • Arjen Hussem & Casper Ewijk & Harry Rele & Albert Wong, 2016. "The Ability to Pay for Long-Term Care in the Netherlands: A Life-cycle Perspective," De Economist, Springer, vol. 164(2), pages 209-234, June.
  • Handle: RePEc:kap:decono:v:164:y:2016:i:2:d:10.1007_s10645-016-9270-7
    DOI: 10.1007/s10645-016-9270-7
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Life-cycle; Long-term care costs; Nearest neighbor resampling method; Self-insurance;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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