By Christine de la Maisonneuve & Joaquim Oliveira Martins
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Additional resources for A PROJECTION METHOD FOR PUBLIC HEALTH AND LONG-TERM CARE EXPENDITURES ECONOMICS DEPARTMENT WORKING PAPERS No. 1048
These cost curves are split into survivors and non-survivors as explained in the text. 70. 1. 5. 41. 005. 00002. ,97). 71. For each country, this expenditure curve by age group is multiplied by country-specific population by age group in order to obtain a total country-specific health expenditure. This expenditure is then calibrated to fit with the OECD database total expenditure in the base year. LTC Dependency ratios 72. The dependency ratios (number of dependants by age group) were derived from the European Commission 2009 Ageing Report.
Finally all the proxies for informal care (female participation or exit rate from the labour force) also turned out to be significant. 2 Projection results: long-term care 2010-2060 52. As for health care, a cost-pressure scenario and a cost-containment scenario were computed. Both scenarios are based on a unitary income elasticity assumption and the "healthy ageing" hypothesis. However, in the cost-pressure scenario, for OECD countries, a full Baumol effect is assumed, meaning that LTC unit labour costs increase fully in line with aggregate labour productivity; for non-OECD countries, excess labour supply especially in the non-tradeable sector suggests weaker wage pressures than in the OECD countries, and therefore the cost-pressure scenario only incorporates half of the Baumol effect.
However, some countries, like Chile, Estonia, Korea, Mexico and Turkey, will experience higher increases (equal to or above 2 percentage points). These countries are starting from a very low level of 32 ECO/WKP(2013)40 LTC expenditure and are in the process of catching up to higher levels. Conversely, Israel, Luxembourg, Sweden, the United-Kingdom and the United States are projected to experience only small increases in their LTC expenditure to GDP ratios (less than 1 percentage point). Differences in the initial level of female participation rates as well as policies in place also explain the differences across countries.
A PROJECTION METHOD FOR PUBLIC HEALTH AND LONG-TERM CARE EXPENDITURES ECONOMICS DEPARTMENT WORKING PAPERS No. 1048 by Christine de la Maisonneuve & Joaquim Oliveira Martins