Income and the utilization of long-term care services: Evidence from the Social Security benefit notch

► The relationship between income and long-term care utilization is difficult to estimate because of unobserved characteristics that may affect both income and the use of long-term care services ► We examine the effect of an unanticipated permanent increase in Social Security income which affected households headed by beneficiaries with less than a high school education within particular cohorts. ► We find that the probability of long-term care service use did not change dramatically; however, an increase in income caused the composition of services to shift away from nursing home utilization and towards home care utilization.