Matteo Luppi (Collegio Carlo Alberto)

“Dependency and Poverty. The effect of LTC spending on dependent elderly people and their families’ income”

Abstract

This work examines the economic conditions of dependent elderly people and their families in order to investigate the existence of a relation between the condition of dependence and the risk of falling into poverty. For this purpose, we divide the research in two phases. In the first phase, based on the recent reform processes that have interested the European long term care (LTC) sectors, we have identified four macro aspects of national LTC systems that may affect the private involvement in the care of older people. Using data from System of Health account (SHA) and ESSPROS, this phase provides a clustering of the European countries on the basis of the characteristics of their LTC systems related the level of private resources (time and money) that dependent elderly people and their family members devote to care. On the basis of the results of the cluster analysis we selected a number of countries in order to estimate the impact of the private care resources on the elderly person and its family income.  The purpose of the second phase is to ascertain a possible connection between the level of private care resources required by the health conditions of the elderly and the risk of poverty, both at an individual level (dependent elderly people) and at the family level (spouse and adult children). We use the first, second and fourth wave of SHARE survey to analyze both LTC-related spending and the elderly person’s and its family income. In the estimation of the relationship between the risk to fall into poverty, the dependency condition, the private resources allocated to care, the individual and family characteristics and the benefits that the dependent elderly people receive from the LTC system we used logistic regression models. Results coming from these models suggest the existence of a relation between the degree of disability, the level of private resources devoted to care and the probability to live in a family at risk of poverty.
Additionally, the SHARE data allows to assess the consequences of the LTC reform processes on services provision and the need for private care resources, shifted onto the dependent elderly family.