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Long-term care and capital accumulation: the impact of the State, the market and the family

Author

Listed:
  • Chiara Canta

    (Norwegian School of Economics)

  • Pierre Pestieau

    (CORE, TSE and University of Liege)

  • Emmanuel Thibault

    (Toulouse School of Economics (IDEI and University of Perpignan))

Abstract

The rising level of long-term care (LTC) expenditures and their financing sources are likely to impact savings and capital accumulation and henceforth the pattern of growth. This paper studies how the joint interaction of the family, the market and the State influences capital accumulation and welfare in a society in which the assistance the children give to dependent parents is triggered by a family norm. We find that with a family norm in place, the dynamics of capital accumulation differ from those of a standard Diamond (Am Econ Rev 55:1126–1150, 1965) model with dependence. For instance, if the family help is sizeably more productive than other LTC financing sources, pay-as-you-go social insurance might be a complement to private insurance and foster capital accumulation.

Suggested Citation

  • Chiara Canta & Pierre Pestieau & Emmanuel Thibault, 2016. "Long-term care and capital accumulation: the impact of the State, the market and the family," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(4), pages 755-785, April.
    • Handle: RePEc:spr:joecth:v:61:y:2016:i:4:d:10.1007_s00199-016-0957-4
    DOI: 10.1007/s00199-016-0957-4
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    Cited by:

    1. Justina Klimaviciute & Pierre Pestieau & Jérôme Schoenmaeckers, 2019. "Family altruism and long-term care insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(2), pages 216-230, April.
    2. Giorgio Fabbri & Marie-Louise Leroux & Paolo Melindi-Ghidi & Willem Sas, 2024. "Conditioning public pensions on health: effects on capital accumulation and welfare," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-21, June.
    3. Philippe De Donder & Marie‐Louise Leroux, 2021. "Long term care insurance with state‐dependent preferences," Health Economics, John Wiley & Sons, Ltd., vol. 30(12), pages 3074-3086, December.
    4. Marie‐Louise Leroux & Gregory Ponthiere, 2020. "Nursing home choice, family bargaining, and optimal policy in a Hotelling economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 899-932, August.
    5. Dimitrios Varvarigos, 2017. "Cultural norms, the persistence of tax evasion, and economic growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(4), pages 961-995, April.
    6. Justina Klimaviciute & Pierre Pestieau, 2023. "The economics of long‐term care. An overview," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1192-1213, September.
    7. Christophe Courbage & Guillem Montoliu‐Montes, 2020. "Estate recovery and long‐term care insurance," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 949-972, August.
    8. Thibault, Emmanuel, 2016. "Demonstration effect and dynamic efficiency," Economics Letters, Elsevier, vol. 147(C), pages 42-45.
    9. repec:bla:annpce:v:89:y:2018:i:1:p:49-63 is not listed on IDEAS
    10. Thibault, Emmanuel & Ponthieres, Grégory, 2023. "Life Expectancy, Income and Long-Term Care: The Preston Curve Reexamined," TSE Working Papers 23-1474, Toulouse School of Economics (TSE).
    11. Masaya Yasuoka, 2019. "Elderly care service in an aging society," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 18-34, January.
    12. Miyake, Atsushi & Shintani, Masaya & Yasuoka, Masaya, 2021. "Elderly Care and Informal Family Care," MPRA Paper 110126, University Library of Munich, Germany.
    13. Achim Kemmerling & Michael Neugart, 2019. "Redistributive pensions in the developing world," Review of Development Economics, Wiley Blackwell, vol. 23(2), pages 702-726, May.
    14. 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).
    15. Pablo Garcia Sanchez & Luca Marchiori & Olivier Pierrard, 2024. "Healthy aging and capital accumulation," BCL working papers 189, Central Bank of Luxembourg.
    16. Betti, Thierry & Lefebvre, Mathieu & Pestieau, Pierre, 2023. "Macroeconomics of aging," LIDAM Discussion Papers CORE 2023002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Luca Marchiori & Olivier Pierrard, 2023. "Health subsidies, prevention and welfare," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(6), pages 1304-1336, December.

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    More about this item

    Keywords

    Long-term care; Capital accumulation; Family norms; Public insurance;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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