The impact of a full implementation of the Action Plan on Dependency 2021–2023 on the Spanish economy

Abstract

Objective: To assess the impact on the economy of the implementation of the Action Plan on Dependency (APD), devised by the Spanish government as a first measure to tackle the major shortages in Dependency Services brought to light pursuant to COVID-19 pandemic. The APD establishes as priority areas the suppression of waiting lists, the improvement of dependency services, with a focus on home-care, and the professionalization and stabilization of employment. Method: To achieve this goal, first, an estimate of the increased demand for benefits and services in 2023 has been carried out, supposing that all the priority measures established in the PCD in 2021 are fully implemented. Then, the impact of investment on the economy has been measured using multisector modeling. This analysis considers not only the direct economic impact on the sectors providing services to dependent population, but also the indirect and induced impact on the economy as a whole. Results: The total public investment required for the plan in 2023 will reach 13,962 million Euro, which represents around 1% of the GDP. The impact on the economy in terms of production is expected to reach 41,570 million, while the impact on gross value added will be 21,046 million, together with the creation of nearly 440,000 jobs. Conclusions: The results reveal that, for the APD to be fully implemented, public funding needs to be increased way beyond the occasional allocation of funds established in the Recovery, Transformation and Resilience Plan. These investments have a positive impact not only on the social and welfare sector, but also on the country's economy.