Applied Seminar

Helena M. Hernandez-Pizarro

Universidad Pompeu Fabra


Seminar 3 – 14:30


Long-Term Care (LTC) policies aim to improve the lives of those individuals who have lost their autonomy in activities of daily living and lessen the financial burden they bear. In OECD countries, 50% of adults aged 65 and over are, to some extent, limited in performing daily activities. Indeed, 20% of over 65s are severely limited. This fact translates into an average LTC expenditure of 1.7% of GDP in OECD countries. Yet, little evidence has shed light on the effects of LTC policies on the beneficiaries. This study analyses the effect of public LTC benefits on mortality. The allocation of benefits is based on the level of LTC needs, which are assessed by examiners following official guidelines. To estimate the causal effect of LTC benefits on mortality, I exploit the quasi-random assignment of examiners to LTC applicants in Spain. Given the variation in examiners’ leniency (i.e. the tendency to grant greater benefits), applicants assigned to more lenient examiners are more prone to get access to a higher degree of benefits. The estimates based on Spanish LTC beneficiaries (2008-2014) indicate that access to greater benefits can be effective at extending beneficiaries’ lives. When the level of LTC needs is moderate, such care is particularly effective at postponing death, as it prevents or delays the impairments worsening. While policymakers tend to prioritise the provision of LTC to individuals with high needs, these findings emphasise the provision of LTC to those at the initial stages of LTC needs.

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