2012 Conference Presentation
While international differences in long-term care (LTC) use are well documented, they are not well understood.
Using panel data from the Netherlands and Germany, this paper examines how institutional differences relate to differences in the choice for informal or formal LTC. Although LTC is organized similarly in both countries, eligibility rules for public LTC coverage and its comprehensiveness differ a lot. Our decomposition of the differences in formal and informal LTC use reveals that between-country differences in LTC use are not chiefly the result of differences in determinants but rather of differences in the effects of these determinants between countries.
Our findings confirm that different eligibility rules explain most of the difference. The role of the spouse’s ability to provide informal care, for instance, has an effect on formal LTC use in the Netherlands but not in Germany. Incomprehensive coverage also has equity implications: for the poor, access to formal LTC is more difficult in Germany than in the Netherlands.