The Future of Long Term Care in Europe. An Investigation Using a Dynamic Microsimulation Model

Abstract

In this paper we investigate the evolution of public European LTC systems in the forthcoming decades, using the Europe Future Elderly Model (EuFEM), a dynamic microsimulation model which projects the health and socio-economic characteristics of the 50 population of ten European countries, augmented with the explicit modelling of the eligibility rules of 5 countries. The use of SHARE data allows to have a better understanding of the trends in the demand for LTC differentiated by age groups, gender, and other demographic and social characteristics in order to better assess the distributional effects. We estimate the future potential coverage (or gap of coverage) of each national/regional public home-care system, and then disentangle the differences between countries in a population and a regulation effects. Our analysis offers new insights on how would the demand for LTC evolve over time, what would the distributional effects of different LTC policies be if no action is taken, and what could be potential impact of alternative care policies.

Keywords: Dynamic Microsimulation, Long Term Care, Forecast, disability, Regulation

JEL Classification: I11, I18, C53, C63, J14, J11