Projections show sharp increases in public spending on long-term care services across Europe. However, a purely cost based
focus on long-term care services is economically misleading. Private and public expenditure on long-term care services directly
and indirectly generate income in the form of salaries, taxes and social security contributions. The aim of this paper is
to quantify the economic impact and multipliers of long-term care services for the first time. Based on an econometric regional
input-output model for Austria, we estimate the direct, indirect and induced effects of public and private expenditures on
value added, employment, taxes and social security contributions. According to our results, each Euro spent on long-term care
services is associated with domestic value added of 1.7 € as well as 0.70 € in taxes and social security contributions. The
economic multipliers of the long-term care services are comparatively high due to the high share of wages and salaries in
direct expenditure and the associated high direct value added. Public expenditure on professional care services should therefore
not be regarded merely as a cost factor in the public budget. Rather, this rapidly growing economic sector is also an increasingly
important economic factor in a time of ageing societies.
Forschungsbereich:Regionalökonomie und räumliche Analyse – Arbeitsmarktökonomie, Einkommen und soziale Sicherheit