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Projecting the Need for Formal and Informal Aged Care in Australia: A Dynamic Microsimulation Approach


  • Binod Nepal

    () (NATSEM, University of Canberra)

  • Laurie Brown

    () (NATSEM, University of Canberra)

  • Simon Kelly

    (NATSEM, University of Canberra)

  • Richard Percival

    (NATSEM, University of Canberra)

  • Phil Anderson

    (Australian Institute for Health and Welfare)

  • Ruth Hancock

    (Health Economics Group, University of East Anglia)

  • Geetha Ranmuthugala

    (Australian Institute of Health Innovation, University of New South Wales)


With the rapid ageing of the Australian population and the growth in the number of older persons and years likely to be lived with disability, the need for and provision of aged care have become one of the central themes of the public policy debate. This paper discusses the construction of a dedicated Aged Care Module built within the large dynamic microsimulation model APPSIM (Australian Population and Policy Simulator). APPSIM is based on the one per cent sample of the 2001 Australian population census and allows simulation of various life cycle events at individual and household levels through to 2051. The Aged Care Module was designed to specifically simulate low and high care needs and the use and costs of informal and formal home and community and residential age care services, building on information on a range of variables including age, gender, disability level, living arrangements and socio-economic status. The methods for imputing baseline data and transition equations for projecting future care needs will be outlined. The number of older Australians likely to need the different types of aged care will be compared with the projected supply of corresponding care places to estimate unmet need for aged care services at the national level over the next 40 years.

Suggested Citation

  • Binod Nepal & Laurie Brown & Simon Kelly & Richard Percival & Phil Anderson & Ruth Hancock & Geetha Ranmuthugala, 2011. "Projecting the Need for Formal and Informal Aged Care in Australia: A Dynamic Microsimulation Approach," NATSEM Working Paper Series 11/07, University of Canberra, National Centre for Social and Economic Modelling.
  • Handle: RePEc:cba:wpaper:wp117

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    References listed on IDEAS

    1. Hancock, Ruth & Juarez-Garcia, Ariadna & Comas-Herrera, Adelina & King, Derek & Malley, Juliette & Pickard, Linda & Wittenberg, Raphael, 2006. "Winners and losers: assessing the distributional effects of long-term care funding regimes," ISER Working Paper Series 2006-43, Institute for Social and Economic Research.
    2. Productivity Commission, 2008. "Trends in Aged Care Services: some implications," Research Papers 0803, Productivity Commission, Government of Australia.
    3. Andreas Werblow & Stefan Felder & Peter Zweifel, 2007. "Population ageing and health care expenditure: a school of 'red herrings'?," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1109-1126.
    4. N/A, 2007. "At a Glance," National Institute Economic Review, National Institute of Economic and Social Research, vol. 200(1), pages 2-3, April.
    5. Martin Spielauer, 2007. "Dynamic microsimulation of health care demand, health care finance and the economic impact of health behaviours: survey and review," International Journal of Microsimulation, International Microsimulation Association, vol. 1(1), pages 35-53.
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