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Long Term Care, Altruism and Socialization

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  • Ponthiere Gregory

    (Paris School of Economics - Ecole Normale Supérieure (Paris))

Abstract

The public provision of long-term care (LTC) can replace family-provided LTC when adults are not sufficiently altruistic towards their parents. But State intervention can modify the transmission of values, and reduce the long-run prevalence of family altruism. To characterize the optimal LTC policy, we develop a three-period OLG model where the adult population is divided into altruistic and non-altruistic agents, and where the transmission of altruism follows a socialization process à la Bisin and Verdier (2001). It is shown that public LTC benefits, by reducing parental investment in children, make the long-run survival of family altruism less likely. However, whether crowding out arises or not depends on individual preferences and on the socialization mechanism at work. We also study the incompatibility of the optimal short-run LTC benefits with long-run social welfare maximization. Finally, we discuss the robustness of our results to introducing savings and universal LTC benefits.

Suggested Citation

  • Ponthiere Gregory, 2012. "Long Term Care, Altruism and Socialization," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 1-47, November.
    • Handle: RePEc:bpj:bejeap:v:13:y:2012:i:2:p:1-47:n:1
    DOI: 10.1515/1935-1682.3358
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    Cited by:

    1. Siciliani Luigi, 2013. "The Economics of Long-Term Care," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 343-375, August.
    2. Bezin, Emeline & Ponthière, Gregory, 2019. "The tragedy of the commons and socialization: Theory and policy," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    3. Bénédicte Apouey, 2018. "Les attentes en termes de services pour les seniors : le rôle de l’altruisme et de l’anticipation de la dépendance," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 15-74.
    4. Yakita, Akira, 2020. "Economic development and long-term care provision by families, markets and the state," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    5. CREMER, Helmuth & PESTIEAU, Pierre & PONTHIERE, Grégory, 2012. "The economics of long-term care: a survey," LIDAM Discussion Papers CORE 2012030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. PESTIEAU, Pierre & PONTHIERE, Gregory, 2016. "The Public Economics of Long Term Care," LIDAM Discussion Papers CORE 2016008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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