Austria 2025 – Challenges and Macroeconomic Effects of Long-term Care Provision

The first microeconometric analysis of home care carried out for all of Austria indicates the health status as a primary factor for choosing the type of care, as well as a complementary relationship between informal and formal care. Projections for public spending on long-term care underline how demographic trends will impact on expected cost increases. By 2025 public expenditure for long-term nursing and care services will already be higher by about 50 percent in real terms than in 2015, and long-term care allowance will rise by about 12 percent. The growth will become explosive only after 2025, when baby boomers enter the very old age cohorts. Between 2025 and 2050 this will triple spending on long-term care services. Through direct and indirect economic interlinkages, expenditures on long-term care services generate tax revenues and social insurance contributions of about 70 percent of the expenditures and generated employment for about 115,000 persons in 2015, as calculated by this first analysis of the macroeconomic effects of the Austrian long-term care sector.