Cognitive versus Physical Impairment and the Use and Cost of Long-Term Care in Japan

Rong Fu, Sizhe Liu, Toshiaki Iizuka and Haruko Noguchi

No 35442, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Japan has the world’s oldest population and a universal Long-Term Care Insurance (LTCI) system, yet how care use and costs differ between cognitive and physical impairment remains underexamined. Using the nationally representative Comprehensive Survey of Living Conditions (2016 and 2019 waves; 324,466 adults aged 65 and older), we compare the utilization, intensity, and cost of long-term care across three groups: those with a dementia diagnosis (defined as regularly receiving medical treatment for dementia), those with physical (ADL) limitations but no dementia, and those with neither. A dementia diagnosis is associated with dramatically higher care use—75.3% receive some care, versus 5.3% of the unimpaired reference group. In models adjusting for demographic and socioeconomic characteristics, dementia raises the probability of receiving formal care by 55 percentage points and informal care by 52 percentage points—roughly double the effects of ADL limitations—and, conditional on use, is associated with about 113 additional hours of formal care per month (some 60% more than physical limitations alone). We estimate formal-care costs at 1.07–4.03% of GDP (depending on the valuation method) and co-residing informal-care costs at 0.79% of GDP. Per-capita formal-care costs are substantially higher for those with dementia (about 3.5 versus 2.0 million JPY annually under the self-reported approach), whereas informal-care costs are nearly uniform across impairment types—underscoring the intensive, and largely invisible, contribution of family caregivers. With the dementia and mild-cognitive-impairment population projected to reach roughly 12 million by 2040, these findings point to mounting fiscal and family-care pressures from cognitive impairment in Japan.

JEL-codes: H51 I11 I18 J14 (search for similar items in EconPapers)
Date: 2026-07
Note: AG
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