Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320096 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11875
Publisher: 
CESifo GmbH, Munich
Abstract: 
The German universal long-term care (LTC) insurance program offers beneficiaries the choice between in-kind services and a cash benefit, which can be used for anything, including informal care. The optimal level of the cash benefit depends on substitution between formal and informal care options, the cost of public funds, and distributional considerations. To evaluate various policy options, we estimate a random-coefficients demand model for the period 1999-2015 using data on the universe of LTC patients supplemented with micro moments from the German Mikrozensus. Results show strong heterogeneity in patient preferences for the three different LTC options: informal, ambulatory and stationary care. A counterfactual analysis predicts that abolishing the cash subsidy leads to a decline in patient surplus that far outweighs the savings in public expenditure. It suggests that manycountries could benefit from the introduction of a cash subsidy option for LTC.
Subjects: 
aging
long-term care
insurance
informal care
JEL: 
I11
G14
L1
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.