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The ability to pay for long-term care in the Netherlands: a life-cycle perspective

Listed author(s):
  • Harry ter Rele

    ()

  • Arjen Hussem
  • Casper van Ewijk
  • Albert Wong

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://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-321-ability-pay-long-term-care-netherlands-life-cycle-perspective.pdf
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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 321.

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Date of creation: Jan 2016
Handle: RePEc:cpb:discus:321
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