The Economic Costs of Informal Care: Estimates from a National Cross-Sectional Survey in The Netherlands

Abstract

AbstractFaced with an unprecedented demand for long-term care, European health care systems are moving towards mixed care models, where the welfare state and informal caregivers share care responsibilities. While informal care is often viewed as a means of alleviating pressure on public care, it comes with significant economic costs for caregivers, their employers, and society at large. This study uses nationally representative data to estimate the total direct (informal care time and out-of-pocket costs) and indirect (productivity) economic costs of informal care in the Netherlands in 2019. Informal care time costs are estimated using the opportunity cost and the proxy good methods. Indirect costs are estimated using the human capital and friction cost approaches. Our results reveal the considerable annual societal cost of informal care in the Netherlands, ranging between €17.5 billion and €30.1 billion, depending on the valuation approach. These costs are equivalent to 2.15% and 3.71% of Dutch GDP in 2019, comparable to the public expenditure on long-term care in that year. Female caregivers account for slightly more than half (53%–57%) of the total costs. Around 57%–88% of these costs are in the form of informal care time. The main driver of indirect costs is the temporary cessation of work, which comprises 12%–17% of the total costs. Findings corroborate that substantial resources, yet thus far largely disregarded, are spent on informal care even in a country with a relatively generous public long-term care system.