Working Paper: NBER ID: w31829
Authors: Rong Fu; Toshiaki Iizuka; Haruko Noguchi
Abstract: Japan, renowned for its significantly aged population, presents a distinctive landscape in elderly care. Notably, there exists no apparent correlation between the economic well-being of the elderly and the limitations they experience in Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs). In response to the escalating demand for elderly care, Japan introduced the public Long-Term Care Insurance (LTCI) system in 2000. This comprehensive program offers a wide spectrum of long-term care services, aiming to facilitate aging in place for seniors and alleviate the burdens on informal caregivers. Nevertheless, the LTCI system faces substantial challenges, predominantly related to financial sustainability and a shortage of human resources. Ongoing discussions center on achieving cost-effective service delivery, potential adjustments to premium rates and copayments, especially for individuals with ample financial resources or minimal care needs. Furthermore, debates surround the reduction of the age of eligibility for LTCI, with opposition stemming from intricate financial and structural considerations. Japan grapples with a deficiency of social security contributors and skilled care workers, necessitating endeavors to enhance labor force participation and foster innovation in the long-term care sector. Japan's LTCI system offers invaluable insights for countries grappling with akin demographic and care-related predicaments.
Keywords: No keywords provided
JEL Codes: I10; I13; I18; I19
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Functional limitations (ADLs, IADLs) (J14) | Economic well-being of the elderly (J14) |
| Long-term care insurance (LTCI) (G52) | Economic well-being of the elderly (J14) |
| Long-term care insurance (LTCI) (G52) | Financial sustainability of care services (G52) |
| Increased demand for long-term care services (J26) | Public spending (H59) |
| Dynamics of informal versus formal care (J46) | Financial outcomes for older adults (J26) |