Abstract
AbstractIn Norway, municipalities have economic incentives for choosing residential care in nursing homes for high‐income clients and home‐based care for low‐income clients. Using a three‐year panel, 2007‐2009, on 427 municipalities we provide an analysis of the effect of the Norwegian long‐term care (LTC) financing system on the composition of LTC services at the municipality level. Our main result is that the composition of service is determined by local government revenue and local need for LTC services. We cannot identify an effect of average income among older people in a municipality regarding the balance between home‐based care and nursing home care. Hence, the results do not provide evidence of a service distortion.
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