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Projected costs of informal care for older people in England

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  • Hu, Bo
  • Cartagena-Farias, Javiera
  • Brimblecombe, Nicola
  • Jadoolal, Shari
  • Wittenberg, Raphael

Abstract

Background Health economics research and economic evaluation have increasingly taken a societal perspective, accounting for the economic impacts of informal care. Projected economic costs of informal care help researchers and policymakers understand better the long-term consequences of policy reforms and health interventions. This study makes projections of the economic costs of informal care for older people in England. Methods Data come from two national surveys: the English Longitudinal Study of Ageing (ELSA, N = 35,425) and the Health Survey for England (N = 17,292). We combine a Markov model with a macrosimulation model to make the projections. We explore a range of assumptions about future demographic and epidemiological trends to capture model uncertainty and take a Bayesian approach to capture parameter uncertainty. Results We estimate that the economic costs of informal care were £54.2 billion in 2019, three times larger than the expenditure on formal long-term care. Those costs are projected to rise by 87% by 2039, faster than public expenditure but slower than private expenditure on formal long-term care. These results are sensitive to assumptions about future life expectancy, fertility rates, and progression of disabilities in the population. Conclusions Prevention schemes aiming to promote healthy aging and independence will be important to alleviate the costs of informal care. The government should strengthen support for informal caregivers and care recipients to ensure the adequacy of care, protect the well-being of caregivers, and prevent the costs of informal care from spilling over to other sectors of the economy.

Suggested Citation

  • Hu, Bo & Cartagena-Farias, Javiera & Brimblecombe, Nicola & Jadoolal, Shari & Wittenberg, Raphael, 2023. "Projected costs of informal care for older people in England," LSE Research Online Documents on Economics 121157, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:121157
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    References listed on IDEAS

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    More about this item

    Keywords

    informal care costs; economic valuation; functional disabilities; long-term care projections; England;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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