Austria 2025 – Long-term Care – Future Public Expenditures and Regional Economic Interlinkages

Long-term projections show that public expenditure for long-term care will rise substantially already until 2025. Under the assumption of a constant structure of long-term care recipients, there will be a further drastic increase in costs between 2025 and 2050 mainly due to demographic developments. The projections of the long-term care allowance show a real increase between 2015 and 2025 of roughly 12 percent and between 2015 and 2050 of 67 percent. Public expenditure for in-kind care services that are financed by the Austrian Länder and communities will increase between 2015 and 2025 by roughly 50 percent but between 2015 and 2050 even by approximately 360 percent. Estimates on regional economic interlinkages of in-kind care services show that in 2015 the public and private expenditure for in-kind care services (3.4 billion €) were associated with direct, indirect and induced effects on gross value-added of 5.9 billion € as well as 115,000 jobs (corresponding to 86,500 full-time equivalents). Total expenditure of long-term care thus generates tax revenues of roughly 1.1 billion € and social insurance contributions of roughly 1.3 billion €. The economic multiplier of the long-term care sector is comparatively high due to the high share of wages in the direct expenditures and the related direct value added.