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Municipalities’ Decision to Care: At Home or in a Nursing Home

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  • Theis Theisen

    (University of Agder)

Abstract

An almost ideal demand system for long-term care is estimated using data from Norway, where the split of long-term care between home care and care in nursing homes is determined by municipalities. Previous literature has barely addressed what determines municipalities’ or other organizations’ allocations of resources to the sub-sectors of long-term care. The results show that home care is a luxury, while nursing home care is a necessity with respect to total expenditures on long-term care. Municipalities respond to high unit costs for home care by reducing that type of care. Municipalities are highly responsive to variations in the need for the two types of care and seem to provide a well-functioning insurance mechanism for long-term care. In the previous empirical literature, municipalities’ role as providers of insurance against the consequences of disabilities and frailty has received scant attention.

Suggested Citation

  • Theis Theisen, 2020. "Municipalities’ Decision to Care: At Home or in a Nursing Home," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(4), pages 327-342, November.
    • Handle: RePEc:kap:iaecre:v:26:y:2020:i:4:d:10.1007_s11294-020-09806-z
    DOI: 10.1007/s11294-020-09806-z
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    References listed on IDEAS

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    More about this item

    Keywords

    Local government spending; Long-term-care; Home care; Nursing home care;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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