Long Term Care, Wealth and Housing

Abstract

We study long-term care demand in the Netherlands for a sample of elderly Dutch households using detailed administrative data. Long-term care in the Netherlands is provided by a public health care system that is generous in comparison to that in many other countries, but offers few possibilities for differentiation. Moving to a nursing home is generally postponed as long as possible because of the loss of privacy involved, while use of care at home increases. We test three hypotheses: i) wealthier people are better able to postpone a move to a nursing home, ii) those who own the house in which they live stay there longer when health deteriorates, and iii) those living in a house that is especially suitable for elderly are better able to postpone a move to nursing home. Results of our analyses confirm hypothesis i) but reject or do not find substantial evidence to confirm ii) and iii).

Keywords: demand for long-term care, elderly housing, ageing

JEL Classification: I11, I12, R21