Population aging is a growing challenge for developed countries like Canada, with significant implications for health care and long-term care systems. In OECD (Organisation for Economic Co-operation and Development) countries, the population of people aged 80 and above is projected to more than double by 2050, reaching 9.8 per cent of the population.
This demographic shift highlights the increasing demand for high-quality long-term care services. Older individuals frequently experience limitations in daily living activities, such as dressing, washing and household tasks.
By 2050, half of people aged 65 or older in OECD nations are expected to report some limitation in daily living, and dementia cases are projected to reach 42 million. Canada is not exempt from this trend.
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In Québec, for instance, around 315,000 individuals require help with daily activities — a number expected to nearly double by 2050.
As the number of elderly people needing care grows, the demand for long-term care services will present significant financial challenges for both individuals and governments. Understanding the economic and demographic factors driving long-term care needs, as well as their implications, is crucial for building a more equitable and robust care system.
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Low-income individuals face double penalty
Research has shown that while life expectancy has increased, it’s unevenly distributed across socioeconomic groups. Factors such as age, ethnicity, gender, income and education play a significant role in determining longevity.
In Canada, men in the top five per cent of earners live, on average, 11 per cent longer than those in the bottom five per cent. For women, the longevity gap between those with the highest earnings and the lowest earnings is 3.6 years. These findings are consistent with research from other countries, including the United States.
However, research on the relationship between income and loss of autonomy is still limited. Some studies suggest that lower socioeconomic status is associated with poorer health outcomes and higher disability rates among older adults.
In the United Kingdom and the U.S., individuals in the bottom third of wealth distribution live seven to nine fewer years without disability compared to those in the top third. Similarly, in Europe, less wealthy individuals have a higher likelihood of becoming dependent and they remain dependent longer.
Understanding these socioeconomic disparities is crucial for shaping public policy and identifying which groups are the most vulnerable. Low-income individuals face a double penalty: they are both more likely to need long-term care and they are less financially equipped to bear the associated costs.
As a result, public long-term care policies might consider prioritizing the support of low-income individuals, since wealthier individuals can more easily afford care.
High-income Canadians live longer
Our research explored the relationships between longevity, dependency and income using data from a 2016 survey of 2,000 Canadians aged 50 to 69.
The data combined both subjective self-reports with objective data about the likelihood of living to age 85, developing limitations in daily living activities or entering a nursing home. Financial resources were measured through reported income and savings.
Our findings show that Canadians with higher incomes are more likely to live to age 85 and are less likely to become dependent. After controlling for several socioeconomic factors, we found that a one per cent increase in income was associated with the following:
- nearly a five per cent increase in survival probability;
- a one per cent decrease in the likelihood of having limitations in daily living activities;
- and a two per cent decrease in the likelihood of entering a long-term care home.
The relationship between income and dependency was particularly strong among individuals in the top third of the income distribution. This suggests that financial resources play a significant role in extending life and maintaining independence as people age.
Interestingly, despite their lower objective likelihood of needing nursing home care, higher-income individuals perceived themselves as more likely to require it. A one per cent increase in income was associated with a four per cent increase in the self-reported probability of entering a nursing home, even though the actual probability of this happening dropped by two per cent.
This discrepancy may be explained by wealthier individuals considering other factors, such as their financial resources and the possibility of receiving care at home from a professional caregiver.
Targeted support is needed
The socio-demographic relationships from our study have important implications for designing equitable long-term care policies. Wealthier individuals tend to live longer and are less often dependent, meaning they are in a better position to pay for long-term care expenses.
On the other hand, low income individuals are more likely to become dependent and may experience greater financial strain if they need to pay for long-term care costs over an extended period, potentially driving them into poverty.
Our findings recommend that provincial and territorial governments should adopt redistributive policies for long-term care. These policies could involve providing additional subsidies aimed at low-income older individuals, either as a preventive measure or when they first become dependent.
This approach aligns with the proposal made by Québec Health Minister Réjean Hébert in 2015, who suggested implementing “autonomy insurance” to help retirees above a certain age manage long-term care costs.
Redistributive policies are critical not only because low-income individuals have fewer financial resources, but also because they face a higher likelihood of dependency. Without targeted support, these individuals could be left struggling to afford the care they need. Designing policies that recognize these disparities can help ensure a more equitable and sustainable long-term care system in Canada.
Marie-Louise Leroux receives funding from FRQSC and SSHRC-CRSH. She is affiliated with CIRANO (Montréal) and CESifo (Munich).
Marie Connolly receives funding from FRQSC and SSHRC-CRSH. She is affiliated with CIRANO (Montréal).
