How do rising care needs impact the formal and informal care sectors and existing inequalities? Comparing Austria and Spain

As populations in Asia and Europe face unprecedented levels of ageing, the demand for long-term care (LTC) is escalating, thereby challenging the sustainability of social protection systems. This paper employs a novel dynamic microsimulation model to project LTC demand and supply in Austria and Spain through 2070, utilising data from the Survey of Health, Ageing and Retirement in Europe (SHARE). The findings of the study indicate that, in the context of the current demographic trends, both Austria and Spain are on course to experience an approximate 90 percent increase in the number of LTC hours required. This increase is primarily driven by improved mortality rates and shifts in population age structures. The model applies a stylized needs assessment and reveals that while the proportion of individuals needing care may decrease until 2040, significant increases in care gaps are anticipated thereafter, necessitating a substantial increase in both formal and informal care provision. The analysis further underscores pronounced variations in care delivery models across the two nations. While Austria places greater emphasis on formal care, Spain's system is marked by a more pronounced reliance on informal care. The analysis suggests that both countries will encounter difficulties in meeting the increasing demand, with the gap between care needs and available hours more than doubling, particularly in Spain. Furthermore, educational attainment plays a crucial role in shaping future care needs, with potential strategies to mitigate demand through enhanced educational opportunities. The scenarios presented demonstrate the sensitivity of LTC needs to assumptions about health trends, emphasising the importance of proactive policy measures tailored to each country's socio-cultural context. The findings of this study indicate a necessity for augmented public funding for formal care services, the implementation of supportive policies for informal caregivers, and the adoption of collaborative approaches among stakeholders to establish sustainable and equitable solutions to the challenges posed by long-term care. The study acknowledges limitations related to data and modelling choices, and suggests avenues for further research on the interplay between education, health improvements, and the evolving dynamics of care provision.