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

Author

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  • Harry ter Rele

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Arjen Hussem
  • Casper van Ewijk
  • Albert Wong

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

  • Harry ter Rele & Arjen Hussem & Casper van Ewijk & Albert Wong, 2016. "The ability to pay for long-term care in the Netherlands: a life-cycle perspective," CPB Discussion Paper 321, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:321
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    Cited by:

    1. Carole Bonnet & Sandrine Juin & Anne Laferrère, 2019. "Private Financing of Long‑Term Care: Income, Savings and Reverse Mortgages," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 507-508, pages 5-24.
    2. Wouterse, B.; & Hussem, A.; & Wong, A.;, 2018. "The effect of co-payments in Long Term Care on the distribution of payments,consumption, and risk," Health, Econometrics and Data Group (HEDG) Working Papers 18/24, HEDG, c/o Department of Economics, University of York.
    3. Bram Wouterse & Arjen Hussem, 2019. "The welfare effects of co-payments in long term care," CPB Discussion Paper 394, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Sandrine Juin, 2016. "Care for dependent elderly people : dealing with health and financing issues," Erudite Ph.D Dissertations, Erudite, number ph16-02 edited by Thomas Barnay, December.
    5. Pieter Bakx & Bram Wouterse & Eddy (E.K.A.) van Doorslaer & Albert Wong, 2018. "Better off at home? Effects of a nursing home admission on costs, hospitalizations and survival," Tinbergen Institute Discussion Papers 18-060/V, Tinbergen Institute.

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    More about this item

    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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