Challenges in Long-term Care: Modelling and Quantifying Future Care Needs, Arrangements and Gaps in Ageing, Low-fertility Societies

A Novel Comparative Approach Applied in Microsimulation Projections for Austria and Italy

Population ageing will reshape economies around the world, with particular implications for long-term care (LTC) systems. As a result of past fertility decline, reflected in high levels of childlessness and smaller family networks, the growing demand for care is confronted by a declining supply of informal care. This paper presents a novel quantitative framework for cross-country comparative analysis and projections of the long-term care sector. The central innovation of this framework is the standardised assessment of care needs in hours, complemented by the modelling of care arrangements, distinguishing between nursing homes, formal home care, informal care provided by a partner, informal care provided by others and care gaps. Modelling at the individual level requires microsimulation for projections that simultaneously consider individual-level characteristics, socio-demographic dynamics and institutional factors, and scenarios such as the role and expansion paths of formal care services. Our work builds on and extends the comparative microsimulation model microWELT, which uses Eurostat population projections while adding key characteristics such as educational differences in fertility, mortality, partnerships and family size. We demonstrate the approach using projections for Austria and Italy. In Austria, the total demand for long-term care is projected to almost double by 2070, while in Italy, where the ageing process is more advanced, the total increase is much lower at around 44 percent. However, in Italy, due to lower fertility and greater reliance on informal care, most of the increased demand would remain unmet under current informal care provision patterns, suggesting a potential care gap larger than that projected for Austria.