Long term care and migration

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Organizing long-term care (LTC) is one of the most pressing challenges for the coming years, both societally and politically. Across OECD countries, the proportion of individuals aged 80 and above will increase from an average of nearly five to almost ten percent of the population by 2050 (OECD, 2020). This rapid aging will have sizable implications for the demand and provision of LTC. The issue of LTC provision is particularly relevant for Germany which, in the ranking of OECD countries with most above-eighty-year-olds by 2050, takes the third place. At the same time, in the yearly list of ‘bottleneck’ occupations complied by the German Federal Employment Agency, the elderly care nurse has been included every time for the last nine years. Like governments in other developed countries, Germany looks to migration to play a large role in meeting the ever-growing demand for care. Indeed, the share of foreign LTC workers in Germany increased from 8% in 2014 to 14% in 2019. With this research proposal, we aim to provide causal evidence on how the inflow of migrant care workers affects long-term care provision. Moreover, besides the labor market implications, we empirically examine if the inflow of migrant care workers affects the quality and the prices of LTC provision and the health outcomes of the care recipients. Specifically, the research proposal includes four different research projects, of all which examine the causal implications of the sizable increase in the supply of migrant LTC workers on a multidimensional set of outcomes: (i) labor market effects including native wages, employment and vacancy in formal LTC on the regional level; (ii) native career trajectories and wage evolution on the individual level, (iii) the availability, quality, and price of formal care services; and (iv) the health outcomes of elderly individuals. This large inflow of migrants was induced by the 2011 and 2014 German labor market openings towards the Eastern European countries and is characterized by strong regional heterogeneity, which is the basis for our identification strategies.