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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

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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    References listed on IDEAS

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    Citations

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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. Thibault, Emmanuel, 2016. "Demonstration effect and dynamic efficiency," Economics Letters, Elsevier, vol. 147(C), pages 42-45.
    3. 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.
    4. De Donder, Philippe & Leroux, Marie-Louise, 2019. "Long Term Care Insurance with State-Dependent Preferences," TSE Working Papers 19-1061, Toulouse School of Economics (TSE).
    5. repec:bla:annpce:v:89:y:2018:i:1:p:49-63 is not listed on IDEAS
    6. Masaya Yasuoka, 2017. "Elderly Care Service in an Aging Society," Discussion Paper Series 168, School of Economics, Kwansei Gakuin University, revised Oct 2017.

    More about this item

    Keywords

    Long-term care; Capital accumulation; Family norms; Public insurance;

    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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