Going Formal or Informal, Who Cares? The Influence of Public Long-Term Care Insurance
28 Pages Posted: 6 Feb 2013
Date Written: February 4, 2013
International differences in long-term care (LTC) use are well documented, but not well understood. Using comparable data from two countries with universal public LTC insurance, the Netherlands and Germany, we examine how institutional differences relate to differences in the choice for informal and formal LTC. While the overall LTC utilization rate is similar in both countries, use of formal care is more prevalent in the Netherlands and informal care use in Germany. Decomposition of the between-country differences in formal and informal LTC use reveals that these differences are not chiefly the result of differences in population characteristics but mainly derive from differences in the effects of these characteristics that are associated with between-country institutional differences. These findings demonstrate that system features like eligibility rules and coverage generosity and, indirectly, social preferences can influence the choice between formal and informal care. Less comprehensive coverage also has equity implications: for the poor, access to formal LTC is more difficult in Germany than in the Netherlands.
Keywords: long-term care, informal care, international comparison, SHARE, decomposition
JEL Classification: I11, I14, I18
Suggested Citation: Suggested Citation