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Title page

Contents

Abstract 3

1. Introduction 4

2. Long-term care and the role of macroeconomic conditions 6

2.1. Institutional background 6

2.2. The effect of macroeconomic conditions on prices of formal long-term care 8

3. Data 8

3.1. Sample 9

3.2. Outcome variables 9

3.3. Macroeconomic conditions 12

3.4. Control variables 14

4. Empirical approach 16

5. Results 16

5.1. Effects on prices of formal long-term care 17

5.2. Potential mechanisms 19

6. Conclusion 23

References 26

Table 1. Descriptive statistics on nursing homes and ambulatory care services, 2005-2015 13

Table 2. Share of cash benefit recipients across districts, 2005-2015 13

Table 3. Effect of a one percentage point increase in unemployment rate on prices of permanent long-term care in German nursing homes, 2005-2015 17

Table 4. Effect of a one percentage point increase in unemployment rate on overall price of permanent long-term care in German nursing homes, robustness,... 18

Table 5. Effect of a one percentage point increase in unemployment rate on overall price of permanent long-term care in German nursing homes, heterogeneity,... 19

Table 6. Effect of a one percentage point increase in unemployment rate on overall price of permanent long-term care in German nursing homes, by type... 20

Table 7. Effect of a one percentage point increase in unemployment rate on employment and working hours in German nursing homes, 2005-2015 21

Table 8. Effect of a one percentage point increase in unemployment rate on staffing in German nursing homes, by degree, 2005-2015 21

Table 9. Effect of a one percentage point increase in unemployment rate on proxies for quality of long-term care in German nursing homes, 2005-2015 22

Table 10. Effect of a one percentage point increase in unemployment rate on recipients of long-term care in German nursing homes, 2005-2015 23

Table 11. Effect of a one percentage point increase in unemployment rate on recipients of long-term care by German ambulatory care providers, 2005-2015 24

Table 12. Effect of a one percentage point increase in unemployment rate on percentage share of cash beneficiaries in population 65 years or older, 2005-2015 24

Figure 1. Mean overall price in 2011 10

Figure 2. Percentage change in mean overall price between 2005 and 2015 11

Figure 3. Mean district unemployment rate in percent over time 14

Figure 4. District unemployment rates in 2011 15

Figure 5. Percentage change in district unemployment rates between 2005 and 2015 15

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