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HomeEconomyLong-term care spending around the world – Healthcare Economist

Long-term care spending around the world – Healthcare Economist

a great paper Gruber et al. 2023 Looks at the evolution of long-term care in ten countries: Canada, Denmark, the United Kingdom, Germany, Italy, Japan, the Netherlands, Singapore, Spain, and the United States. There are three categories of long-term care: institutional care, formal home care, and informal care. For the 10 countries surveyed, the paper found:

  • National long-term care spending. Long-term care expenditures account for an average of 2.1% of GDP, and the proportion of GDP increased by 60% from 2000 to 2019.
  • patient fees. The cost of long-term care will be beyond the financial means of most older adults in every country. As a result, the public sector bears most of the costs (for example, about 2/3 of long-term care costs in the United States are borne by the government)
  • Spending on formal and informal care. The proportion of spending on home care (compared to institutional care) varies across countries, ranging from 23% in Spain to 63% in Japan
  • Informal care costs.Informal care accounts for a large portion of total long-term care, and the cost of this informal care (in terms of foregone wages and other costs) should be included in any measure of the true cost of long-term care
  • Long-term care risks: Long-term care needs increase rapidly with age and disability
  • Formal vs. informal care: The few elderly people receiving assistance rely on alone Receive formal care (i.e. institutional care or paid home care), while most receive at least some informal care from family or other unpaid caregivers
  • worker gender. In all of these countries, women provide the vast majority of formal care, but care is more equally distributed between genders in providing informal rather than formal care.
  • worker's salary: High-skilled formal care workers are paid quite well in all countries, often equal to or above the average wage across the economy, but low-skilled care workers are paid very differently between countries, with wages ranging from less than half.The average salary in the United States is more than three-quarters of the average salary in Denmark and Japan

Created based on Table 4,


What datasets are available for studying long-term care needs? Gruber et al. This article uses the following sources, all modeled primarily on HRS. They are nationally representative longitudinal surveys of individuals starting around age 50.

  • us. Health and Retirement Studies (HRS)
  • Europe: European Health, Aging and Retirement Survey (share)
  • U.K.. The British Longitudinal Study of Aging (ELSA),
  • Japan. Japan Research on Aging and Retirement (JSTAR)

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