EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: Ten years have passed since the Swedish government widely encouraged its municipalities to marketize their elderly care services. There has been a long-standing discussion on the benefit of marketization during that period, but most of the discussions were developed from the case studies of a limited number of municipalities. With lately available statistics, the present study tries to find some general rules across many different municipalities. Regarding the motives of the municipalities for marketization of elderly care, there is apparently a tendency that municipalities with more bourgeois politicians and a larger size of elderly population are likely to rely more on privately managed service. As for the effect of marketization, it is shown that the cost performance is better in those municipalities allowing the participation of private providers to certain extent than in others. Also, the cost performance seems to have an association with the political representation of municipalities, although somewhat modestly.

Keywords: elderly care; market competition; Sweden; municipality

JEL-codes: I38; L33

25 pages, December 1, 2001

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