A Family-Based Macro-simulation Model on the Supply and Demand of Care for ADRD

Project Summary In 2022, more than 6 million individuals suffered from Alzheimer's disease and related dementia (ADRD) in the United States, and this figure is projected double to 12.7 million by 2050. As ADRD progresses, individuals experience cognitive decline and require significant long-term care and help with essential daily activities. As the U.S. population ages, the demand

for elder care, especially for patients living with ADRD, is outpacing the supply. We propose examining the different components of ADRD caregiving within a comprehensive framework by using a novel modeling approach, macro-simulation. Using the family as a decision-making unit, we will simulate individual- and family-level economic and well-being outcomes based on

the rich literature and datasets on ADRD caregiving and its impacts. We will then aggregate these outcomes based on a structural macroeconomic model to assess the overall implications of family care decisions. Families often face difficult tradeoffs in making care arrangements and deciding how to allocate

family resources to meet the needs of their elderly members. Our proposed approach models the decision-making process of the family when determining the combination of formal and informal care while considering a wide array of factors such as care needs, the availability of caregivers, and the cost of formal care. Simultaneously, the framework incorporates the supply

of formal paid care in the market, how it depends on labor market conditions and how it responds to changes in demand for paid care. We combine data from various nationally representative household surveys to simulate a dataset that is unique in scope to characterize health, socioeconomic, and well-being outcomes, and family composition. Our ultimate goal is

to develop an analytic tool that informs the design, targeting, and implementation of effective public policies that address care challenges. We use our comprehensive framework to simulate demographic trends, including growth in aging population, and policy interventions that affect the demand and supply of care to examine their effects.