On insuring and caring for parents’ long-term care needs
When adult children are financially responsible for their parents, they can take considerable interest in the amount of their parents’ long-term care (LTC) insurance. In this paper, we look at the optimal levels of LTC insurance and of informal care, and at the link between these two decisions when the child, who provides informal care, is also the decision-maker with regard to LTC insurance. Interestingly, results differ depending on the degree of both parental and child altruism and indicate either complementarity or substitutability between insurance and informal care. In particular, we show in the presence of child altruism that insurance stimulates the offer of informal care, contrary to the case where the insurance decision is made by the elderly parent. We also investigate how exogenous shocks with respect to the opportunity cost of informal care, initial wealth levels and bequests modify simultaneously the optimal level of insurance and informal care.
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.
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.:
- 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.
- Eric Bonsang, 2008. "Does Informal Care from Children to their Elderly Parents Substitute for Formal Care in Europe?," CREPP Working Papers 0801, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
- Christophe Courbage & Nolwenn Roudaut, 2008. "Empirical Evidence on Long-term Care Insurance Purchase in France*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 33(4), pages 645-658, October.
- Brown, Jeffrey R. & Finkelstein, Amy, 2007.
"Why is the market for long-term care insurance so small?,"
Journal of Public Economics,
Elsevier, vol. 91(10), pages 1967-1991, November.
- Jeffrey R. Brown & Amy Finkelstein, 2007. "Why is the market for long-term care insurance so small?," NBER Chapters, in: Trans-Atlantic Public Economics Seminar (TAPES), Public Policy and Retirement, pages 1967-1991 National Bureau of Economic Research, Inc.
- Christophe Courbage & Peter Zweifel, 2011. "Two-sided intergenerational moral hazard, long-term care insurance, and nursing home use," Journal of Risk and Uncertainty, Springer, vol. 43(1), pages 65-80, August.
- Bernard van den Berg & Han Bleichrodt & Louis Eeckhoudt, 2005.
"The economic value of informal care: a study of informal caregivers' and patients' willingness to pay and willingness to accept for informal care,"
John Wiley & Sons, Ltd., vol. 14(4), pages 363-376.
- B. Van den Berg & H. Bleichrodt & L. Eeckhoudt, 2005. "The economic value of informal care: a study of informal caregivers' and patients' willingness to pay and willingness to accept for informal care," Post-Print hal-00200697, HAL.
- Zweifel, Peter & Struwe, Wolfram, 1996. "Long-Term Care Insurance and Bequests as Instruments for Shaping Intergenerational Relationships," Journal of Risk and Uncertainty, Springer, vol. 12(1), pages 65-76, January.
- Tian Zhou-Richter & Mark J. Browne & Helmut Gründl, 2010. "Don't They Care? Or, Are They Just Unaware? Risk Perception and the Demand for Long-Term Care Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(4), pages 715-747.
- Denis Kessler, 2010. "Confronting the Challenge of Long-term Care in Europe," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(2), pages 18-23, 07.
- 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.
- Pauly, Mark V, 1990. "The Rational Nonpurchase of Long-term-Care Insurance," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 153-68, February.
- Mellor, Jennifer M., 2001. "Long-term care and nursing home coverage: are adult children substitutes for insurance policies?," Journal of Health Economics, Elsevier, vol. 20(4), pages 527-547, July.
When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:31:y:2012:i:6:p:842-850. 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 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.