Abstract

Recent projections of long-term care costs across Western societies show a significant rise in the upcoming decades. This is mainly due to demographic developments, but also due to a reduction of families’ capacities to deliver informal care.

This paper presents projections of in-kind long-term care expenditures in Austria until 2050 with a focus on the assumptions and methods. The projections are based on demographic developments (changes in the demographical structure, changes of health conditions of the elderly) and non-demographic developments (reduction of informal care, changes in costs), keeping care prevalence and care policy constant.

The projections show that public expenditure for in-kind long-term care will rise substantially already until 2025. Under the assumption of a constant structure of in-kind long-term care recipients, there will be a further drastic increase in costs between 2025 and 2050 mainly due to demographic developments. The projections of the public expenditure for in-kind care services that are financed by the Austrian Länder and communities will increase between 2015 and 2025 by roughly 50 percent but between 2015 and 2050 even by approximately 360 percent.

We discuss these results against the background of the current long-term care policy in Austria and argue that an expansion of both mobile and in-patient care is inevitable.

However, focusing only on costs does not reflect the economic importance of the long-term care sector. Looking at the economic interlinkages of in-kind care services reveal a comparatively high economic multiplier of the long-term care sector due to the high share of wages in the direct expenditures and the related direct value added (see abstract by Gerhard Streicher and Ulrike Famira-Mühlberger).