Long-Term Care, Altruism and Socialization
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 `a la Bisin and Verdier (2001, The economics of cultural transmission and the dynamics of preferences. Journal of Economic Theory 97:298–319). 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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 14 (2013)
Issue (Month): 2 (October)
|Contact details of provider:|| Web page: http://www.degruyter.com|
|Order Information:||Web: http://www.degruyter.com/view/j/bejeap|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pierre Pestieau & Motohiro Sato, 2008.
"Long-Term Care: the State, the Market and the Family,"
London School of Economics and Political Science, vol. 75(299), pages 435-454, 08.
- PESTIEAU, Pierre & SATO, Motohiro, 2004. "Long term care: the state, the market and the family," CORE Discussion Papers 2004082, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Sloan, Frank A & Norton, Edward C, 1997. "Adverse Selection, Bequests, Crowding Out, and Private Demand for Insurance: Evidence from the Long-Term Care Insurance Market," Journal of Risk and Uncertainty, Springer, vol. 15(3), pages 201-19, December.
- Jeffrey R. Brown & Amy Finkelstein, 2004. "Supply or Demand: Why is the Market for Long-Term Care Insurance So Small?," NBER Working Papers 10782, National Bureau of Economic Research, Inc.
- Pierre Pestieau & Grégory Ponthière, 2010.
"Long term care insurance puzzle,"
PSE Working Papers
- Hoerger, Thomas J. & Picone, Gabriel & Sloan, Frank, 1995.
"Public Subsidies, Private Provision of Care, and Living Arrangements of the Elderly,"
95-22, Duke University, Department of Economics.
- Hoerger, Thomas J & Picone, Gabriel A & Sloan, Frank A, 1996. "Public Subsidies, Private Provision of Care and Living Arrangements of the Elderly," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 428-40, August.
- Grégory Ponthière, 2008.
"Unequal longevities and lifestyles transmission,"
PSE Working Papers
- Bisin, A. & Verdier, T., 1997.
"The Economics of Cultural Transmission and the Dynamics of Preferences,"
DELTA Working Papers
97-03, DELTA (Ecole normale supérieure).
- Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
- Jeffrey R. Brown & Amy Finkelstein, 2004.
"The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market,"
NBER Working Papers
10989, National Bureau of Economic Research, Inc.
- Jeffrey R. Brown & Amy Finkelstein, 2008. "The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market," American Economic Review, American Economic Association, vol. 98(3), pages 1083-1102, June.
- Norton, Edward C., 2000. "Long-term care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 17, pages 955-994 Elsevier.
- Alain Jousten & Barbara Lipszyc & Maurice Marchand & Pierre Pestieau, 2005.
"Long-term Care Insurance and Optimal Taxation for Altruistic Children,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 61(1), pages 1-, March.
- JOUSTEN, Alain & LIPSZYC, Barbara & MARCHAND, Maurice & PESTIEAU, Pierre, . "Long-term care insurance and optimal taxation for altruistic children," CORE Discussion Papers RP 1753, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Javier Olivera, 2013. "Old-age Support and Demographic Transition in Developing Countries. A Cultural Transmission Model," Working Papers 201307, Geary Institute, University College Dublin.
- Sloan, Frank A & Picone, Gabriel & Hoerger, Thomas J, 1997.
"The Supply of Children's Time to Disabled Elderly Parents,"
Western Economic Association International, vol. 35(2), pages 295-308, April.
- Sloan, Frank & Gabriel Picone & Thomas J. Hoerger, 1995. "The Supply of Children's Time to Disabled Elderly Parents," Working Papers 95-46, Duke University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:14:y:2013:i:2:p:429-471:n:1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.