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Population ageing and the public finance burden of dementia: A simulation analysis

Author

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  • María Noel Pi Alperin
  • Magali Perquin
  • Gastón A. Giordana

Abstract

This paper uses long-term population projections to study the evolution of dementia in Luxembourg through 2070, as well as its impact on public expenditure through healthcare and long-term care. We extend the Giordana and Pi Alperin (2022) model by adding an algorithm to identify individuals suffering from dementia. This allows us to simulate dementia prevalence among individuals aged 50 and more in several scenarios incorporating alternative hypotheses about risk factors, new treatments and comorbidities (including long-run effects of COVID-19). Public health policies reducing stroke and hypertension risk could lower dementia prevalence by 17% and public expenditure on healthcare for dementia patients by a similar amount. A new treatment extending the mild dementia phase could nearly double prevalence and possibly triple the associated healthcare costs. Finally, past exposure to COVID-19 could raise prevalence by 12% to 24% in the medium term and public expenditure on dementia healthcare by 6% to 12%. Public expenditure on long-term care for dementia patients would increase even more, generally doubling by 2070.

Suggested Citation

  • María Noel Pi Alperin & Magali Perquin & Gastón A. Giordana, 2023. "Population ageing and the public finance burden of dementia: A simulation analysis," BCL working papers 170, Central Bank of Luxembourg.
    • Handle: RePEc:bcl:bclwop:bclwp170
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    File URL: https://www.bcl.lu/en/publications/Working-papers/170/BCLWP170.pdf
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    References listed on IDEAS

    as
    1. María Noel Pi Alperin, 2016. "A multidimensional approach to measure health," Economics Bulletin, AccessEcon, vol. 36(3), pages 1553-1568.
    2. Giordana, Gastón A. & Pi Alperin, María Noel, 2023. "Old age takes its toll: Long-run projections of health-related public expenditure in Luxembourg," Economics & Human Biology, Elsevier, vol. 50(C).
    3. Linus Jönsson & Anders Wimo, 2009. "The Cost of Dementia in Europe," PharmacoEconomics, Springer, vol. 27(5), pages 391-403, May.
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    1. Giordana, Gastón A. & Pi Alperin, María Noel, 2023. "Old age takes its toll: Long-run projections of health-related public expenditure in Luxembourg," Economics & Human Biology, Elsevier, vol. 50(C).

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    More about this item

    Keywords

    Dementia; Dynamic micro-simulation; Healthcare; Health-related public expenditure; Long-term care; Luxembourg; SHARE;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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