Nursing home aversion post-pandemic: Implications for savings and long-term care policy

J Econ Behav Organ. 2022 Sep;201:1-21. doi: 10.1016/j.jebo.2022.06.034. Epub 2022 Jul 22.


COVID-19 outbreaks at nursing homes during the recent pandemic have received ample media coverage and may have lasting negative impacts on individuals' perception of nursing homes. We argue that this could have sizable and persistent implications for savings and long-term care policies. Our theoretical model predicts that higher nursing home aversion should induce higher savings and stronger support for policies subsidizing home care. Based on a survey of Canadians aged 50 to 69, we document that higher nursing home aversion is widespread: 72% of respondents are less inclined to enter a nursing home because of the pandemic. Consistent with our model, we find that these respondents are more likely to have higher intended savings for old age because of the pandemic. We also find that they are more likely to strongly support home care subsidies.

Keywords: Long-term care; Nursing home; Pandemic risk; Public policy; Savings.