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Does the expansion of public long-term care funding affect savings behaviour?

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  • Costa-Font, Joan
  • Vilaplana-Prieto, Cristina

Abstract

The effect of further public caregiving subsidies (and insurance expansions to cover long-term care) on savings and saving behaviour is far from clear. In this paper we take advantage of a policy intervention to study the effect on savings and savings behaviour of the progressive introduction of a universal public long-term care subsidy (Sistema para la Autonomía y Atención a la Dependencia, SAAD) from 2007 in Spain. We draw on a difference-in-difference strategy (DID) to show a contraction of savings after the policy intervention, but only among younguer elders who receive primarily cash benefits (unconditional caregiving allowance) as opposed to home help (ammouting 13-38% of the allowance). Saving reductions of individuals in the second and third quintile of income distribution, those without children and those residing in regions that implemented the reform earlier, drive the effect.

Suggested Citation

  • Costa-Font, Joan & Vilaplana-Prieto, Cristina, 2017. "Does the expansion of public long-term care funding affect savings behaviour?," LSE Research Online Documents on Economics 68139, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:68139
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    File URL: http://eprints.lse.ac.uk/68139/
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    10. Joan Costa-Font & Montserrat Costa-Font, 2011. "Explaining Optimistic Old Age Disability and Longevity Expectations," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 104(3), pages 533-544, December.
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    Cited by:

    1. Joan Costa-Font & Sergi Jimenez-Martin & Cristina Vilaplana-Prieto & Analía Viola, 2023. "Universalizing the Access to Long-term Care: Evidence from Spain," NBER Working Papers 31825, National Bureau of Economic Research, Inc.
    2. Joan Costa-Font & Sergi Jiménez & Cristina Vilaplana Prieto & Analía Viola, 2022. "Long-term Care in Spain," Studies on the Spanish Economy eee2022-23, FEDEA.
    3. Costa-Font, Joan & Jiménez-Martín, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?," Journal of Health Economics, Elsevier, vol. 84(C).
    4. Costa-Font, Joan & Vilaplana-Prieto, Cristina, 2022. "Mental health effects of caregivers respite: Subsidies or Supports?," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    5. Joan Costa-Font, 2023. "How to support adult caregivers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 510-510, June.
    6. Costa-Font, Joan, 2017. "“Institutionalization aversion” and the willingness to pay for home health care," Journal of Housing Economics, Elsevier, vol. 38(C), pages 62-69.

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    More about this item

    Keywords

    long-term care insurance; saving behaviour; long-term care services and support; universalisation; Spain;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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