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Economic trends: home and community-based care versus institution-based care

 
Various aspects of the care industry
October 2024
How has long-term care employment changed with an aging U.S. population?

Mary Dorinda Allard

As the population ages, the workforce that provides long-term services and support to elderly people—as well as those with disabilities and others needing assistance—has grown considerably. Traditionally, much of this care has been provided in institutional settings, such as nursing homes. However, many people prefer to age in place, both because they wish to remain in their homes and because it may be less expensive.

This Spotlight will compare industries that provide home and community-based services with those that provide institution-based care.

Employment higher in home and community-based care than institution-based care

The two industries that provide care in home and community-based settings together accounted for 4.3 million jobs in July 2024, considerably higher than the 3.3 million jobs in the industries that provide care in institutional settings. Services for the elderly and people with disabilities, with employment of 2.5 million, includes adult day care centers, nonmedical home care, and companionship. Home health care services, which primarily provides skilled nursing care in the home, accounted for 1.8 million jobs.

Skilled nursing care facilities, with employment of 1.5 million, was the largest institution-based care industry. Continuing care retirement communities and assisted living facilities for the elderly accounted for another 981,000 jobs. Employment was 673,000 in residential disability, mental health, and substance abuse facilities, and 166,000 in other residential care facilities. 

Employment in home and community-based care industries up sharply from 1990

In home and community-based care industries, employment grew dramatically from 1990 to 2024; services for the elderly and people with disabilities added 2.3 million jobs, and home health care services added 1.5 million.

By contrast, institution-based care industries had much slower job growth over the same period. Continuing care retirement communities and assisted living facilities added the most jobs, up 659,000. Skilled nursing care facilities had the largest downward shift in industry employment share. Skilled nursing care facilities accounted for more jobs than all other care-related industries combined in 1990 but became the second largest care-related industry in 2016 and the third largest in 2020.

Women accounted for a majority of jobholders in all care-related industries

In July 2024, the share of jobs held by women ranged from 83.4 percent in home health care services to 70.9 percent in residential disability, mental health, and substance abuse facilities. By contrast, 48.3 percent of private-sector jobs were held by women.

In most care-related industries, the share has trended down since 1990, when comparable data were first available. The share has declined most for home health care services (down 8.9 percentage points from 1990 to 2024). For the private sector overall, the share has risen by 2.7 percentage points over the same period.

Home and community-based care industries had steep job losses at the onset of the pandemic

Sharp employment declines at the onset of the pandemic occurred in home and community-based care industries. In March and April of 2020, services for the elderly and people with disabilities lost 8.9 percent of its jobs, and home health care services lost 7.1 percent. By July 2024, employment for both industries was well above their February 2020 levels (+21.0 percent and +14.8 percent, respectively).

Institution-based care industries had smaller job losses in March and April of 2020, but their employment continued to trend down for more than a year. By March 2022, skilled nursing care facilities had lost 15.5 percent of its February 2020 employment level. By July 2024, employment in the industry was 7.3 percent lower than prior to the pandemic.

Average weekly hours lowest in home and community-based care industries

In general, average weekly hours were lowest in industries providing care in home and community-based settings. In July 2024, the average workweek was 29.0 hours for private-sector employees in home health care services and 29.4 hours in services for the elderly and people with disabilities.

Hours were generally highest in other residential care facilities and in residential disability, mental health, and substance abuse facilities. In July 2024, the average workweek in these two industries was 37.9 hours and 35.6 hours, respectively.

Average annual wages lowest in services for the elderly and people with disabilities

In 2023, average annual wages per employee were lower for all care-related industries than the private-sector average of $72,608, continuing a long-term pattern. Annual average wages were lowest in services for the elderly and people with disabilities, at $26,496. At $47,034, they were highest in skilled nursing care facilities.

Average annual wages per employee by state, 2023

Average annual wages varied by state and industry

In all but 2 states, the care-related industry with the lowest average annual wages in 2023 was services for the elderly and people with disabilities. Average annual wages in this industry ranged from $20,227 in Texas to $49,077 in the District of Columbia.

The industry with the highest average annual wages varied by state but most often was either skilled nursing care facilities or home health care services. In all but 3 states, average annual wages for each of the care-providing industries was lower than the private-sector average for the state overall.

Business establishment sizes smallest in services for the elderly and people with disabilities

Among care-related industries, services for the elderly and people with disabilities had the smallest business establishments in 2023, with an average of 2.4 employees per establishment. In this industry, many establishments consist of a single caregiver providing home-based care. By contrast, skilled nursing care facilities—which can serve hundreds of people at a time—averaged 71.3 employees per establishment, well above the private-sector average of 11.4 employees per establishment.

Home and community-based care industries had higher shares of health care occupations

In the two home and community-based care industries, a majority of jobs in 2023 were in health care occupations—86.3 percent of jobs in services for the elderly and people with disabilities and 84.9 percent in home health care services. The largest occupation was home health and personal care aides, which accounted for 82.3 percent of jobs in services for the elderly and people with disabilities and 58.1 percent of jobs in home health care services.

Institution-based care industries had smaller shares of jobs in health care occupations. The largest share (64.8 percent) was in skilled nursing care facilities, and the smallest (35.6 percent) was in other residential care facilities.

Employment in home and community-based care industries projected to grow considerably

Employment in the two home and community-based care industries is projected to grow considerably from 2023 to 2033, much more than in industries that provide institutional care.

Employment in services for the elderly and people with disabilities is projected to grow by 26.5 percent, far above the projected growth of 4.0 percent for the nation overall. Employment in home health care services is projected to increase by 20.0 percent. The growth in these two industries is expected to be driven by the aging population and the increasing prevalence of chronic diseases.

Among institution-based care industries, employment is projected to decline by 1.9 percent in skilled nursing care facilities.

More information

Mary Dorinda Allard is an Assistant Commissioner in the Office of Employment and Unemployment Statistics, Bureau of Labor Statistics. For questions about this Spotlight, please email allard.dorinda@bls.gov.

Industries in this Spotlight are classified according to the 2022 North American Industry Classification System (NAICS).

Data in slides 2 through 6 are from the Current Employment Statistics. Data for private-sector totals do not include the agricultural sector. Average weekly hours measure the average number of hours per worker for which pay was received, regardless of whether they worked full time or part time.

Data in slides 7 through 9 are from the Quarterly Census of Employment and Wages (QCEW). Private-sector totals include the agricultural sector. The QCEW is primarily based on quarterly unemployment insurance tax reports that nearly all employers are required to file. Thus, jobs not covered by unemployment insurance may not be included. Annual average wages include total compensation paid to an employee, such as wages, bonuses, stock options, and severance pay. Employees include those who work full time or part time.

Data in slides 10 and 11 are from the Employment Projections program. Totals include both the agricultural sector and government employment.