The multiplier effect from the development of a long-term care system for elderly citizens

Lately, the demand for long-term care for the elderly as well as the requirements to its quality have been increasing worldwide. The annual growth in the volume of state investment in the system of long-term care for the elderly generates multiplier effects for the development of certain types of activities in the services sector. The article aims to devise a method for calculating these effects. The methodological basis of the study is the Keynesian multiplier and institutional theory. Statistical and economic methods are applied. The paper performs calculations using the own method based on the Keynesian approach and including a system of linear equations. The data comes from twelve pilot social welfare institutions of the Stavropol krai (Russia). The authors formulate the own definitions to the concepts “multiplier effect in the long-term care system” and “multiplier of the development of the long-term care system (for services)”. According to the results of testing the suggested method, the annual increase in state investment funds allocated for the long-term care system leads to an increase in the expenditures of pilot institutions on various types of services (transport, utilities, education, communications, catering, cultural events, health resort treatment). The findings expand theoretical and practical knowledge about the peculiarities of determining the multiplier effect.