Long-Term Care Insurance and Family Norms
AbstractAbstract: Long-term care (LTC) is mainly provided by the family and subsidiarily by the market and the government. To understand the role of these three institutions, it is important to understand the motives and the working of family solidarity. In this paper, we focus on the case when LTC is provided by children to their dependent parents out of some norm that has been inculcated to them during their childhood by some exemplary behavior of their parents towards their own parents. In the first part, we look at the interaction between the family and the market in providing for LTC. The key parameters are the probability of dependence, the probability of having a norm-abiding child and the loading factor. In the second part, we introduce the government which has a double mission: correct for a prevailing externality and redistribute resources across heterogeneous households.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 14 (2013)
Issue (Month): 2 (April)
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Web page: http://www.degruyter.com
Other versions of this item:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
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