In this paper, we use a two-period overlapping generations model to examine the behavior of an economy that incorporates intergenerational transfers of time. In the first part, we describe the dynamics and steady state of the economy in which there is no government. We show that the rate of life expectancy has negative impact on the steady-state level of the capital stock. In the second part, we study the role and the effect of public long-term care policy. We also show that public long-term care lowers the steady-state level of the capital stock but enhances the welfare when the rate of tax is small.
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number
07-04.
Find related papers by JEL classification: E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General I12 - Health, Education, and Welfare - - Health - - - Health Production J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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