1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

A Projection Method for Public Health and Long-Term Care Expenditures

This paper proposes a new set of public health and long-term care expenditure projections until 2060, seven years after a first set of projections was published by the OECD. It disentangles health from longterm care expenditure, as well as the demographic from the non-demographic drivers, and refines the previous methodology, in particular by extending the country coverage. Regarding health care, nondemographic drivers are identified, with an attempt to better understand the residual expenditure growth by determining which share can be explained by the evolution of health prices and technology effects. Concerning LTC, an estimation of the determinants of the number of dependants (people needing help in their daily life activities) is provided. A cost-containment and a cost-pressure scenario are provided, together with sensitivity analysis. On average across OECD countries, total health and long-term care expenditure is projected to increase by 3.3 and 7.7 percentage points of GDP between 2010 and 2060 in the cost-containment and the cost-pressure scenarios respectively. For the BRIICS over the same period, it is projected to increase by 2.8 and 7.3 percentage points of GDP in the cost-containment and the costpressure scenarios respectively.

English

Keywords: demographic and non-demographic effects, public health expenditures, long-term care expenditures, ageing populations, projection methods, longevity
JEL: J14: Labor and Demographic Economics / Demographic Economics / Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination; H51: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Health; I12: Health, Education, and Welfare / Health / Health Behavior; J11: Labor and Demographic Economics / Demographic Economics / Demographic Trends, Macroeconomic Effects, and Forecasts
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