In the “cost pressures” scenario, a 'full Baumol' effect is assumed implying that LTC costs per dependant will increase in line with overall labour productivity. In the “cost-containment” scenario, policy action is able to contain the cost pressures associated with the Baumol effect. In the latter scenario, governments would deploy a continuous effort to generate productivity gains and/or contain upward pressures on wages of staff providing long-term care. For health care: the size of the income elasticity, the magnitude of the residual, as well as factors underlying health status scenarios and demographic projections were tested.