An Open Letter from Economists and Public Policy Scholars in Support of Investments in Home and Community Based Services

Oct. 7, 2021

We, the undersigned, agree that robust investments in home and community based services must be a part of any major economic legislation. Access to care services are a foundational part of our national infrastructure, and Congress should allocate a minimum of $250 billion in the reconciliation package to the home and community based services (HCBS) program.

Every day, 10,000 people turn 65, and by 2060, 94.7 million Americans will be 65 or older. Seventy percent of people over the age of 65 will require long-term care at some point in their lives. As a result, the caregiving workforce will need to grow significantly in order to keep up with demand. Most Americans would prefer to receive care at home rather than a nursing home: not only do they experience better outcomes, but the monthly median cost of a home health aide is $4,576, compared to $7,756 for a semi-private room in a nursing home. However, today, over 820,000 people are on waitlists for services, potentially resulting in unnecessary nursing home placements, heavy burdens placed on families, or seniors going without needed care. At the same time, 2.4 million essential home care workers are paid on average $12 an hour, and up to 18%--one in six home care workers--live in poverty, contributing to high turnover and worker shortages.

Investing in home care makes economic sense: it will create jobs, seniors and their families prefer it, it will reduce spending by shifting people out of nursing homes, and improve care outcomes. Research has also shown that elder care reduces the labor supply of care-givers. As a result of these effects, a recent analysis from Moody’s analytics found that investing in home and community based services has a near-term benefit in the economic recovery with an economic multiplier greater than one, meaning that every dollar spent boosts the recovery by more than a dollar. Longer-term, the analysis estimates higher economic growth by boosting the employment of family caregivers.

This Investment Will Create Jobs and Opportunity for Those Currently Carrying the Burden of Care

This historic investment in HCBS will strengthen the economy, both by creating jobs and by allowing people who are currently providing unpaid care to loved ones the support they need to rejoin the labor force. An analysis of the Senate bill found that expanding HCBS eligibility to allow an additional 3.2 million low-income seniors and people with disabilities would create 500,000 new and essential positions to provide home-care and allow 1.1 million unpaid caregivers to return to work.

Even as home care is quickly growing into one of the largest occupations, there are even more family caregivers providing care to the elderly and people with disabilities. There are almost 20 million informal caregivers to people over 65, and they are disproportionately women, most often spouses and daughters. Without support, caregiving can have negative effects on caregivers’ physical and mental health, as well as limiting caregivers’ ability to remain in the workforce, while public investment can actually improve caregiver mental health and boost female labor force participation. Recently, the US has seen female labor force participation stagnate relative to many other developed countries. By alleviating caregiving burdens, one of the key constraints to women’s workforce participation, investing in home care will help the US maintain a competitive workforce.

This Investment Will Improve the Quality of Care

COVID-19 has exposed the dangers of underinvestment in our long-term care system. A robust, well-trained home care workforce is essential to protecting seniors and allowing them to live healthy lives. Currently, wages and benefits for home care workers are extremely low--many home care workers live in poverty and do not have health insurance, despite the essential and important service they perform. These low wages mean that workers often have to work multiple jobs, are likely to burn out, and firms have difficulty hiring and retaining workers, leading to more underinvestment. Increasing funding will allow higher pay for home care workers, while making it still more affordable than institutional options, while reducing turnover and absenteeism, and increasing the availability of workers. At current rates, some patients who are physically able to receive care at home end up in nursing homes because they are unable to find consistent home care. Research from nursing homes has found that increasing wages for direct care workers improves health outcomes for patients. The same is likely to be true in the case of home care.

Lawrence Katz, Harvard University

Heidi Shierholz, Economic Policy Institute

Betsey Stevenson, University of Michigan

Cecilia Muñoz, New America

David Cutler, Harvard University

Jonathan Gruber, MIT

Richard Frank, The Brookings Institution

Jesse Rothstein, University of California, Berkeley

Emmanuel Saez, University of California Berkeley

Gabriel Zucman, University of California, Berkeley

Carol Zabin, University of California, Berkeley

Peter Q. Blair, Harvard University (GSE)

David Autor, MIT Department of Economics

Claire Montialoux, University of California, Berkeley

Luke Tate, Arizona State University

Sonal Shah, Georgetown University

Jacob S. Hacker, Yale University

Michael Hout, New York University

Anne-Marie Slaughter, New America

Melody C, Barnes, The Miller Center, University of Virginia School of Law

Laura Dresser, University of Wisconsin

Heidi Hartmann, American University

Thomas L Hungerford, National Academy of Social Insurance

Kristin Smith, Dartmouth College

Ruth Milkman, City University of New York, Graduate Center

Nicolas Robert Ziebarth, Cornell University

Trevon D Logan, The Ohio State University

Michael Reich, University of California, Berkeley

Catherine Maclean, Temple University

James P. Ziliak, University of Kentucky

Tara D. McGuinness, Georgetown University

Juliana Londono-Velez, University of California, Los Angeles

Daniel Tannenbaum, University of Nebraska - Lincoln

Susan Lambert, University of Chicago

Andreas Mueller, The University of Texas at Austin

Anna Stansbury, ​​MIT Sloan

Stephen J. Rose, George Washington University

Maria S. Floro, American University

Nancy Folbre, University of Massachusetts Amherst

Jeannette Wicks-Lim, University of Massachusetts, Amherst

Sean F. Reardon, Stanford University

Mary C. King, Portland State University

C Matthew Snipp, Stanford University

David B. Grusky, Stanford University

John Schmitt, Economic Policy Institute

Indivar Dutta-Gupta, Georgetown Center on Poverty and Inequality

C. Nicole Mason, Institute for Women’s Policy Research

Jennifer Cohen, Miami University

Shirin Arslan, American University

Randy Albelda, University of Massachusetts Boston

Daniel Carpenter, Harvard University

Scott W. Allard, University of Washington

Priyanka Anand, George Mason University

Lenore Palladino, University of Massachusetts Amherst

Molly D. Dillon, Obama White House Domestic Policy Council

Lily Roberts, Center for American Progress

Andres Vinelli, Center for American Progress

Jocelyn Frye, Center for American Progress

Ben Zipperer, Economic Policy Institute

Robert A. Blecker, American University

Rene P. Rosenbaum, Michigan State University

Chris Tilly, University of California, Los Angeles

Ebru Kongar, Dickinson College

Manuel Pastor, University of Southern California Equity Research Institute

Annette Bernhardt, University of California Berkeley Labor Center

Tynan Challenor, University of California Berkeley Labor Center

Pamela Loprest, Urban Institute

Michael Ash, University of Massachusetts Amherst

Lisa M. Lynch, Brandeis University

Jennifer Sherer, Economic Policy Institute

Dave Kamper, Economic Policy Institute

Henry M. Levin, Teachers College, Columbia University

Monique Morrissey, Economic Policy Institute

Robert M Anderson, University of California, Berkeley

Prasannan Parthasarathi, Boston College

Tracy Mott, University of Denver

Candace Howes, Connecticut College

Teresa Ghilarducci, The New School

Christian E. Weller, McCormack Graduate School, University of Massachusetts Boston

Ken Jacobs, University of California, Berkeley Labor Center

Enrique Lopezlira, University of California, Berkeley Labor Center

Pamela Egan, University of California, Berkeley Labor Center

Nari Rhee, University of California, Berkeley

Peter Hans Matthews, Middlebury College

Yavuz Yasar, University of Denver

Alan A. Aja, Brooklyn College (CUNY)

Richard Walker, University of California, Berkeley

Adam S. Hersh, Economic Policy Institute

John Miller, Wheaton College

John Melcher, Michigan State University

Jodi M. Sturgeon, PHI

Karen Shen, Research Improving People's Lives

Stephen E. Baldwin, Ph.D., Retired, Bethesda, MD

David Grabowski, Harvard Medical School

David Wilkinson, Tobin Center for Economic Policy at Yale

Amanda R. Kreider, Leonard Davis Institute of Health Economics, University of Pennsylvania

Martha J. Bailey, University of California, Los Angeles

Jeffrey S. Crowley, O'Neill Institute/Georgetown Law

Rachel M. Werner, University of Pennsylvania

Courtney Harold Van Houtven, Duke University School of Medicine

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