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Optimal public provision of nursing homes and the role of information

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  • Kuhn, Michael
  • Nuscheler, Robert

Abstract

Abstract Increasing demand for long-term care poses at least five challenges to the policy-maker: (i) How should care be supplied, within a nursing home or within the family? (ii) What level of care should be provided in the different arrangements? (iii) How do the answers relate to the severity of dependence? (iv) How can financial strain be mitigated for families with severely dependent members? (v) What is the role of information constraints for the nature and scope of optimal long-term care policy? We consider a theoretical model of long-term care provision under adverse selection to address these challenges. Our main - and remarkably robust - result is that nursing home care facilitates self selection and mitigates and possibly eliminates distortions in caring levels and transfers. Informational asymmetries may thus lead to care being provided too often within institutions rather than within a family context.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 30 (2011)
Issue (Month): 4 (July)
Pages: 795-810

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Handle: RePEc:eee:jhecon:v:30:y:2011:i:4:p:795-810

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Web page: http://www.elsevier.com/locate/inca/505560

Related research

Keywords: D82 H23 I18 J14 Adverse selection Long-term care Nursing homes Redistribution;

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References

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Citations

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Cited by:
  1. Fevang, Elisabeth & Kverndokk, Snorre & Røed, Knut, 2008. "Informal Care and Labor Supply," IZA Discussion Papers 3717, Institute for the Study of Labor (IZA).
  2. Nuscheler, Robert & Roeder, Kerstin, 2013. "The political economy of long-term care," Munich Reprints in Economics 19324, University of Munich, Department of Economics.
  3. Elisabeth Fevang & Snorre Kverndokk & Knut Røed, 2012. "Labor supply in the terminal stages of lone parents’ lives," Journal of Population Economics, Springer, vol. 25(4), pages 1399-1422, October.
  4. Sergi Jiménez-Martín & Cristina Vilaplana Prieto, 2013. "Informal Care and intergenerational transfers in European Countries," Working Papers 2013-25, FEDEA.

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