Seminar of the Fiscal Policy Analysis Unit, on Wednesday, January 28 from 15:00 to 16:00 CET,on The challenge of Long-Term Care: the Italian case at the crossroads of demographics, policy reforms, and the search for sustainable funding, delivered by Marcello Morciano (University of Modena and Reggio Emilia).This will be an hybrid seminar, taking place in the Machado room of the JRC Seville and on Webex.

Link to the session: Seminar link, click to access

Abstract

Italy’s rapidly aging population— most notably the projected doubling of the 80+ group by 2050—poses profound challenges for the Long-Term Care (LTC) system. Declining family-based care, chronic underfunding, territorial fragmentation, and a heavy reliance on unconditional cash transfers such as the Indennità di Accompagnamento have produced a system increasingly misaligned with current and future care needs and unable to support a robust and regular formal care market, the only scalable response to rising demand.

Yet the expansion of formal care is itself constrained by low wages, skill shortages, high turnover, and pervasive informality, while the potential contributions of assistive technologies and AI remain insufficiently understood. These structural pressures are set to increase both public and private LTC expenditures, making LTC financing choices ever more relevant for inter- and intra-generational equity, labour supply development, and the distribution of risks across families, the state, and market actors.

In this seminar, I will present new evidence on the structural weaknesses of Italy’s LTC system, drawing on recent policy reform proposals and empirical analyses of administrative data. Building on demographic projections, I will assess future spending needs across cash transfers, residential care, and home based services under the current system, and quantify the additional resources required to operationalise a proposed reform. I will then examine integrated financing strategies to close the LTC funding gap, discussing how alternative models, including general taxation, inheritance based options, and pension linked instruments such as the Enhanced Pension Annuity (EPA) and Life Care Annuity (LCA)) perform in terms of equity and long term sustainability.

Author

Marcello Morciano is Associate Professor of Public Finance at the Department of Economics “Marco Biagi” of the University of Modena and Reggio Emilia. He serves as Director of CAPP, the Center for the Analysis of Public Policies, and holds international appointments as Honorary Senior Lecturer in Health Policy and Economics at the University of Manchester (UK) and Visiting Research Associate at the Care Policy and Evaluation Centre of the London School of Economics (UK). His research focuses on the ex ante and ex post evaluation of public policies, with articles published in leading journals including European Economic Review, Journal of the Royal Statistical Society: Series A (Statistics in Society), Economic Inquiry, Review of Income and Wealth, Fiscal Studies, Health Economics, Health Policy, Social Science & Medicine, European Journal of Health Economics, and Journal of Pension Economics and Finance.