In many developed countries, especially in Europe and Japan, populations are aging. This is driven by both an increase in life expectation and low fertility rates leading to an increase in the share of older people. Some of these extra years of life will most likely be spent with some level of dependency requiring care. Moreover, a drastic change in the family structures with more childless households or more mobile children requires the provision of formalized care arrangements. An important question in many countries is how to adapt the provision of long-term care (LTC) to the changing needs of aging populations.
Long-term care can be financed by different means involving individuals and households (self-insurance, e.g. by real estate, or through family members who can provide care), private insurance, and public insurance (contribution or tax-based). The combination of the instruments differs by country with some countries employing only pure forms. Determining the efficient mix is a challenging task and currently under debate in many countries. A related point is the so called LTC insurance puzzle, stating that in most countries (except France and the USA) private LTC insurance markets are underdeveloped despite the high risk and costs associated with long-term care.
The goal of the first sub-project is to give empirical insights into the structure of long-term care provision using the SHARE data set. A possible explanation for the LTC insurance puzzle is a lack of information about the provision and organization of long-term care from the perspective of the individuals / households. We inserted a new question on LTC insurance in wave 5 of SHARE. Combing the answers of the survey on LTC provision and insurance coverage with information about the institutional design in the corresponding countries conclusions about the actual understanding of the system can be drawn. This is important for the efficient design of LTC. This project phase has been finalized. Results were published in the SHARE first results book: Ageing in Europe - Supporting Policies for an Inclusive Society.
The second sub-project focuses on LTC insurance in Germany. We examine public and private LTC coverage over time among the German population using the SAVE data set. One interesting feature of the German LTC market is the combination of private and public coverage. In addition to that in 2012 public subsidies for private LTC insurance designed similarly to the so-called Riester subsidies for old-age pensions have been introduced. Based on the new SAVE data 2013 we provide first evidence how the subsidies change the coverage with private LTC insurance among German households. We are particularly interested which households are aware of and have already responded to the new subsidies shortly after their introduction. This sub-project is conducted in cooperation with Prof. Dr. Annette Hofmann (HSBA Hamburg).