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Long-term care in insurance and optimal taxation for altruistic children

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  • JOUSTEN, Alain
  • LIPSZYC, Barbara
  • MARCHAND, Maurice
  • PESTIEAU, Pierre

Abstract

We model long-term care insurance in an optimal taxation framework. Every adult decides upon the amount and type of care he purchases for his dependent parent. We consider two alternatives: nursing-home care provided by the government and home-care paid by the child with some lump-sum subsidy by the government. The only source of information asymmetry stems from the governments inability to observe the degree of altruism of the adult child for his/her parent. Further tax collection entails some social costs. In such a second best setting, we show that the quality of institutional care has to be kept relatively low and that compared to altruistic children, non-altruistic ones enjoy a high level of consumption.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2003063.

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Date of creation: 00 Sep 2003
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Handle: RePEc:cor:louvco:2003063

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  1. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
  2. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Guy Dumais & Glenn Ellison & Edward L Glaeser, 1998. "Geographic Concentration as a Dynamic Process," Working Papers 98-3, Center for Economic Studies, U.S. Census Bureau.
  4. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
  5. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
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Cited by:
  1. Cremer, Helmuth & Roeder, Kerstin, 2011. "Long-term care policy, myopia and redistribution," TSE Working Papers 12-314, Toulouse School of Economics (TSE), revised May 2012.
  2. Rebillard, Cyril & Duée, Michel & Wittwer, Jérôme & Gramain, Agnès, 2007. "Les contributions privées au financement de la dépendance dans le cadre de l'obligation alimentaire : pratiques judiciaires et implications macroéconomiques," Economics Papers from University Paris Dauphine 123456789/1722, Paris Dauphine University.

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