Analysing possible solutions to future challenges in the provision of long-term care services for the elderly – evidence from Germany

Countries worldwide are being confronted with an ageing society, with the share of the oldest old growing particularly fast. While increasing life expectancy is cause for celebration, it also brings economic and fiscal challenges. Long-term care needs associated with chronic illnesses are most prevalent among the highest age groups. It can therefore be expected that the number of people in need of long-term care will continue to grow in coming years. To safeguard the sustainability of the provision and financing of long-term care in the face of population aging, both supply of long-term care and public policy need to be adjusted.

My research agenda aims to contribute to the development of a profound understanding of the factors influencing the demand for long-term care services and the social optimality of potential long-term care market outcomes. First, I will investigate the welfare implications of a broad range of long-term care subsidy schemes by analyzing how demand for long-term care services reacts to changes in subsidy schemes. Second, I will evaulate how negative health externalities in the long-term care market affect the trade-offs faced by policymakers pursuing a welfare maximizing long-term care policy. Finally, I will model and analyze the factors driving long-term care transitions, explicitly accounting for the inherently intertemporal nature of the long-term care decision-making process.