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Private, social and self insurance for longterm care: a political economy analysis

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  • De Donder, Philippe
  • Pestieau, Pierre

Abstract

We study the political determination of the level of social long-term care insurance when voters also choose private insurance and saving amounts. Agents di§er in income, probability of becoming dependent and of receiving family help. Social insurance redistributes across income and risk levels, while private insurance is actuarially fair. The income-to-risk ratio of agents determines whether they prefer social or private insurance. Family support crowds out the demand for both social and, especially, private insurance, as strong prospects of family help drive the demand for private insurance to zero. The availability of private insurance decreases the demand for social insurance but need not decrease its majority chosen leve

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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 719.

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Date of creation: Dec 2011
Date of revision: Jun 2014
Handle: RePEc:ide:wpaper:25821

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  1. Nuscheler, Robert & Roeder, Kerstin, 2013. "The political economy of long-term care," Munich Reprints in Economics, University of Munich, Department of Economics 19324, University of Munich, Department of Economics.
  2. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1999. "The political economy of social security," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 1999055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Bonsang, Eric, 2009. "Does informal care from children to their elderly parents substitute for formal care in Europe?," Journal of Health Economics, Elsevier, vol. 28(1), pages 143-154, January.
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Cited by:
  1. De Donder Philippe & Leroux Marie-Louise, 2013. "Behavioral Biases and Long-Term Care Insurance: A Political Economy Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 551-575, May.
  2. De Donder, Philippe & Leroux, Marie-Louise, 2012. "Behavioral Biases and Long Term Care Annuities: A Political Economy Approach," TSE Working Papers, Toulouse School of Economics (TSE) 12-352, Toulouse School of Economics (TSE), revised Feb 2013.

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