The political economy of long-term care
We build a two-dimensional political economy model to explain the provision and financing of long-term care and income redistribution. Voting agents differ in need and income opening up two conflicts: one sets families with disabled parents, who are in favor of a public long-term care program, against the ones without such parents who oppose public financing. The other sets the poor against the rich with the former preferring heavier income taxation than the latter. We show that a structure induced equilibrium always exists and that it is unique if informal care is provided in equilibrium. The equilibrium not only explains the negative association of income inequality and long-term care financing but also allows predictions about how demographic change might impact long-term care arrangements and expenses.
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.:
- Bolin, K. & Lindgren, B. & Lundborg, P., 2008.
"Your next of kin or your own career?: Caring and working among the 50+ of Europe,"
Journal of Health Economics,
Elsevier, vol. 27(3), pages 718-738, May.
- K. Bolin & B. Lindgren & P. Lundborg, 2007. "Your Next of Kin or your Own Career? Caring and Working among the 50+ of Europe," Tinbergen Institute Discussion Papers 07-032/3, Tinbergen Institute.
- Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
- Darius Lakdawalla & Tomas Philipson, 2002.
"The Rise in Old-Age Longevity and the Market for Long-Term Care,"
American Economic Review,
American Economic Association, vol. 92(1), pages 295-306, March.
- Darius Lakdawalla & Tomas Philipson, 1998. "The Rise in Old Age Longevity and the Market for Long-Term Care," NBER Working Papers 6547, National Bureau of Economic Research, Inc.
- Thomas Philipson & Darius Lakdawalla, 1998. "The Rise in Old Age Longevity and the Market for Long-Term Care," University of Chicago - George G. Stigler Center for Study of Economy and State 146, Chicago - Center for Study of Economy and State.
- Miguel Gouveia, 1997.
"Majority rule and the public provision of a private good,"
Springer, vol. 93(3), pages 221-244, December.
- Gouveia, Miguel, 1997. "Majority Rule and the Public Provision of a Private Good," Public Choice, Springer, vol. 93(3-4), pages 221-244, December.
- Kuhn, Michael & Nuscheler, Robert, 2011. "Optimal public provision of nursing homes and the role of information," Journal of Health Economics, Elsevier, vol. 30(4), pages 795-810, July.
- Maurice March & Fred Schroyen, 2005. "Can a Mixed Health Care System be Desirable on Equity Grounds?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 1-23, 03.
- Peter C. Coyte & Mark Stabile, 2001.
"Household Responses to Public Home Care Programs,"
NBER Working Papers
8523, National Bureau of Economic Research, Inc.
- 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.
- Schulz, Erika & Leidl, Reiner & Konig, Hans-Helmut, 2004. "The impact of ageing on hospital care and long-term care--the example of Germany," Health Policy, Elsevier, vol. 67(1), pages 57-74, January.
- Besley, T. & Coate, S., 1989.
"Public Provision Of Private Goods And The Redistribution Of Income,"
36, Princeton, Woodrow Wilson School - Discussion Paper.
- Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-984, September.
- Hoel, Michael & Saether, Erik Magnus, 2003.
"Public health care with waiting time: the role of supplementary private health care,"
Journal of Health Economics,
Elsevier, vol. 22(4), pages 599-616, July.
- Michael Hoel & Erik Magnus Sæther, 2001. "Public Health Care with Waiting Time: The Role of Supplementary Private Health Care," CESifo Working Paper Series 562, CESifo Group Munich.
- Charles, Kerwin Kofi & Sevak, Purvi, 2005. "Can family caregiving substitute for nursing home care?," Journal of Health Economics, Elsevier, vol. 24(6), pages 1174-1190, November.
- JOUSTEN, Alain & LIPSZYC, Barbara & MARCHAND, Maurice & PESTIEAU, Pierre, 2003. "Long-term care in insurance and optimal taxation for altruistic children," CORE Discussion Papers 2003063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Galasso, Vincenzo, 2008. "Postponing retirement: the political effect of aging," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2157-2169, October.
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
- Cremer, Helmuth & Gahvari, Firouz, 1997. "In-kind transfers, self-selection and optimal tax policy," European Economic Review, Elsevier, vol. 41(1), pages 97-114, January.
- Van Houtven, Courtney Harold & Norton, Edward C., 2004. "Informal care and health care use of older adults," Journal of Health Economics, Elsevier, vol. 23(6), pages 1159-1180, November.
- Carmichael, Fiona & Charles, Sue, 1998. "The labour market costs of community care1," Journal of Health Economics, Elsevier, vol. 17(6), pages 747-765, December.
- Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
- Carmichael, F. & Charles, S. & Hulme, C., 2010. "Who will care? Employment participation and willingness to supply informal care," Journal of Health Economics, Elsevier, vol. 29(1), pages 182-190, January.
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:62:y:2013:i:c:p:154-173. 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: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.