The impact of path dependency and elderly care on sustainable economic growth and employment in North of Spain

The aim of this paper is to estimate the economic impact of the public expenditure on long-term care of dependent people (including elderly and disabled) and considering both residential and day-care centers. The authors individually collected data from each of the 68 centers analyzed in a region in the North of Spain. The economic impact is measured using Leontief methodology in terms of employment, production, revenues from social security contributions and tax revenues via the Value Added Tax (VAT), Personal Income Tax (IRPF) and Corporate Tax. The results indicate that, per invested million euros, more than 30 jobs are created. The production multiplier is near 2, and the return rate by taxes and social security contributions that the Administration get is near 60 for each 100 euros invested. The findings are especially relevant given the need for governments to promote economic growth and help social policy decision-making in a context in which aging population and the increased need for social services compel governments to allocate a growing amount of financial resources to dependency care. This expenditure in long- term care of dependent people is an excellent investment opportunity with a huge ability to generate employment and wealth.