Future long-term care expenditure trajectories across OECD countries

By 2050, the share of people aged 65 and over is projected to reach 26.4% of the total population across OECD countries. As long-term care (LTC) services -covering assistance with daily tasks such as eating, mobility and bathing -are essential to maintaining the well-being and autonomy of older persons, demographic ageing will drive a substantial increase in both demand for LTC and the public resources required to finance it. Ensuring the long-term sustainability of public finances therefore requires a forward-looking assessment of future LTC spending trends. This paper develops projections for public LTC expenditure to 2050, distinguishing between the health-related component (assistance with activities of daily living) and the social-care component (assistance with instrumental activities of daily living). Using time-series data from the OECD System of Health Accounts (2003-2022) and dependency measures derived from EU-SILC and national surveys, regression analyses identify the main drivers of LTC spending. These estimated relationships are then applied in a projection model for OECD countries. The analysis also includes three alternative scenarios: a cost-pressure scenario, a healthy-ageing scenario, and an enhanced-productivity scenario. Under baseline projections, public LTC expenditure is expected to almost double between 2023 and 2050, reaching 2.8 % of GDP across OECD countries. This reflects increases of 0.5 percentage points for the health component (up to 1.7% of GDP), and 0.7 percentage points for the social component (up to 1.1% of GDP). These upward pressures will occur alongside projected increases in other ageing-related spending: public pension expenditure is expected to rise from 8.8% to 10% of GDP, and public health spending from 5.5% to 8.8% of GDP over the same period. Given that demographic ageing is both predictable and long-lasting, countries have the opportunity -and responsibility -to plan and implement whole-of-government strategies to ensure sustainable LTC systems. This includes anticipating rising demand, strengthening workforce capacity, improving productivity in LTC provision, and integrating LTC reforms with broader strategies to address higher pension and healthcare costs.