Demographic change and the labor market for long-term care in Germany

Carsten Pohl, Institute for Employment Research (IAB)

Due to the increase in the birth deficit and the increase in life expectation the share and the absolute number of elderly people will significantly increase in Germany in the decades ahead. The labor market for long-term care will be affected by this increase since more people in need of care will live in Germany. At the same time the labor supply will decrease so that the question of the adequate provision of long-term care arises. The aim of this paper is to show on the basis of the future number of people in need of care to what extend the labor market for professional long-term care may develop until the year 2030. Based on data from the Federal Statistical Office of Germany I will show that the type of the long-term care arrangement will crucially affect the labor market for long-term care. In particular, informal care is essential since there is a substituional relationship between informal and professional workers in the provision of long-term care. In addition, the demand for professional long-term care workers will decrease if there are improvements in productivity. In order to quantify these effects alternative scenarios have been developed taking into account the engagement of relatives as well as improvement in the ratio professional worker per person in need of care.