Barbara Lipszyc, Etienne Sail, Ana Xavier
(European Economy. Economic Papers. 469. November 2012.
Brussels. PDF. 90pp. Tab. Graph. Ann. Free.)
KC-AI-12-469-EN-N ISBN: 978-92-79-22990-9
Public provision of long-term care (LTC) will pose an increasing challenge to the sustainability of public finances in the EU, due to an ageing population. In this view, the paper aims to provide indications on the timing and potential fiscal impact associated to changes in the demographic structure. The ageing of the population is expected to put pressure on governments to provide long-term care services as (very) old people often develop multi-morbidity conditions, which require not only long-term medical care but assistance with a number of daily tasks. This paper presents the projections of public expenditure on LTC in the long run (2060) under alternative assumptions. All scenarios project a non-negligible increase in public expenditure. All other things being equal, the expected increase in the demand for formal LTC support will vary across EU-27 Member States according to their current patterns of LTC provision: the balance between formal and informal care, the emphasis they put on institutional care, home care or provision of cash benefits, the supply constraints both in the formal and informal care sectors, the current average cost and coverage rate for each type of care and their distribution across age groups. The paper also discusses policy implications of the projection results.