An Estimation of the Individual Illiquidity Risk for the Elderly Spanish Population with Long-Term Care Needs

摘要

We study the individual illiquidity risk applied to the Spanish population aged over 64. This risk refers to the probability that an individual cannot afford long-term care costs and other expenses during their retirement. We analyse the case in which an individual is beneficiary of a contributory pension (a retirement or a widowhood pension) and has a degree of dependence (Ⅰ, Ⅱ, or Ⅲ). Results show that illiquidity risk increases with age, and women present higher risk than men regardless of age and degree of dependence. The study reveals the vulnerable financial situation for individuals with moderate dependency, due to the low level of benefit that is received in this case.