The Ability to Pay for Long-Term Care in the Netherlands: A Life-cycle Perspective

Arjen Hussem (), Casper Ewijk, Harry Rele () and Albert Wong ()
Additional contact information
Arjen Hussem: PGGM
Harry Rele: CPB Netherlands Bureau of Economic Policy Analysis
Albert Wong: National Institute for Public Health and the Environment

De Economist, 2016, vol. 164, issue 2, No 5, 209-234

Abstract: Abstract This paper uses synthetic life-cycle paths at the individual level to analyze the distribution of long-term care expenditures in the Netherlands. Using a comprehensive set of administrative data 20,000 synthetic life-cycle paths of household income and long-term care costs are constructed using the nearest neighbor resampling method. We show that the distribution of these costs is less skewed when measured over the life-cycle than on a cross-sectional basis. This may provide an argument for self-insurance by smoothing these costs over the life-cycle. Yet costs are concentrated at older ages, which limits the scope for self-insurance. Furthermore, the paper investigates the relation between long-term care expenditures, household composition, and income over the life-cycle. The expenditures on a lifetime basis from the age of 65 are higher for low income households, and (single) women.

Keywords: Life-cycle; Long-term care costs; Nearest neighbor resampling method; Self-insurance (search for similar items in EconPapers)
JEL-codes: C33 D12 H53 I13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10645-016-9270-7

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