Long term care: the state, the market and the family
AbstractIn this paper we study the optimal design of a long term care policy in a setting that includes three types of care to dependent parents: public nursing homes, financial assistance by children and assistance in time by children. The instruments are public nursing homes and subsidies to aiding children, both financed by a flat tax on earnings. The only source of heterogeneity is children's productivity. Parents can influence their children by leaving them gifts before they know whether or not they will need long term care, yet knowing the productivity of the children. We show that the quality of nursing homes and the level of tax-transfer depend on their effect on gifts, the distribution of wages and the various inequalities in consumption. We also consider the possibility of private insurance.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2004082.
Date of creation: 00 Dec 2004
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long term care; altruism; bequests;
Other versions of this item:
- Pierre Pestieau & Motohiro Sato, 2008. "Long-Term Care: the State, the Market and the Family," Economica, London School of Economics and Political Science, vol. 75(299), pages 435-454, 08.
- PESTIEAU, Pierre & SATO, Motohiro, . "Long-term care: the state, the market and the family," CORE Discussion Papers RP -2150, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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