Financial Sustainability of the Care for the Disabled: A Simulation of Benefits for Older People in the Baltic States up to 2036 with Data from SHARE and Eurostat

The care for the disabled is a societal concern for many nations. This study documents a simulation to support the discussion related to the financial sustainability of this care. The simulation relies on Eurostat data and 1,120 observations provided by 769 unique respondents who participated in the Survey of Health, Ageing, and Retirement in Europe (SHARE) in 2020 and 2022. A Poisson panel estimator is used to obtain the effects of gender, age, income, and nationality on the amount of disability benefits and pensions. The simulation procedure integrates these coefficients as well as accounts for the forecasted population change, income growth, and disability prevalence change occurring in the period 2026 up to 2036. The results suggest the occurrence of a notable increase in the annual total amount of disability benefits and pensions in the upcoming decade for women 85+ in the Baltic States. For men, a remarkable increase is suggested for the 55-to-64-year-olds in Latvia and Lithuania. To conclude, the results may provide some valuable insight to policymakers and institutions to ensure the long-term care for the disabled in the Baltic States.