Labor Market Conditions and the Quality of Long-Term Care Provided to Older Adults

The rapid aging of the U.S. population, with high rates of Alzheimer’s Disease and related dementias (ADRD),is expected to result in substantial increases in the demand for long term care (LTC) services. Adequately meeting this demand and ensuring that older adults are able to age with dignity will require both a large and high-quality LTC workforce. Yet low wages, combined with highly demanding work, make it difficult to fill current positions for nursing assistants at nursing homes and for home health care aides. This raises concerns about the role of the workforce in the persistently low quality of LTC in the U.S. and the ability of the current supply of LTC workers to meet future demand. Policy makers have a number of tools to influence the quality and quantity of the LTC workforce, but there is a lack of empirical evidence about the specific impacts these policy levers have on the size and nature of the LTC workforce, or on the quality of LTC delivered to older adults. Using extensive variation in labor market polices over a long time range (1999-2018) and rich outcomes data from the CMS, we will address several important questions about how government policies might impact the LTC workforce and elder outcomes. The project has four Specific Aims. Aim 1, to examine the impact of state LTC worker regulations on the quality of LTC, examines policies targeted specifically at the LTC sector, including minimum training requirements for nursing home and home aides and minimum staffing requirements for nursing homes. Aim 2, to assess how government labor market policy affects LTC quality,evaluates minimum wages, earned income tax credits, and child care tax credits, three federal and state policies that have been shown to have significant effects on the overall labor market. Aim 3, to examine the impact of immigration policy on LTC quality, first documents the impact that immigration flows have on the size of the LTC workforce, both in nursing homes and people’s homes, and then uses instrumental variable techniques to examine how changes in the stock of immigrant workers impact patient quality outcomes. Aim 4, to assess impacts of labor market policy on ADRD care, focuses on individuals with ADRD a group that is heavily dependent on LTC and may be particularly affected by changes in the LTC workforce due to their vulnerability and potential need for specialized care. Taken together, this set of analyses will provide a novel lens through which to view government labor market policies that drive the quantity and quality of LTC. Results can inform evidence-based policy making designed to promote an adequate workforce to meet the country’s increasing demand for LTC services.