Long term care: the state, the market and the family
In this paper we study the optimal design of a long term care policy in a setting that includes three types of care to dependent parents: public nursing homes, financial assistance by children and assistance in time by children. The instruments are public nursing homes and subsidies to aiding children, both financed by a flat tax on earnings. The only source of heterogeneity is children's productivity. Parents can influence their children by leaving them gifts before they know whether or not they will need long term care, yet knowing the productivity of the children. We show that the quality of nursing homes and the level of tax-transfer depend on their effect on gifts, the distribution of wages and the various inequalities in consumption. We also consider the possibility of private insurance.
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- Sloan, Frank & Harold H. Zhang, 1995.
"Upstream Intergenerational Transfers,"
95-15, Duke University, Department of Economics.
- 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).
- 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.
- CREMER, Helmuth & PESTIEAU, Pierre, .
"Non-linear taxation of bequests, equal sharing rules and the tradeoff between intra- and inter-family inequalities,"
CORE Discussion Papers RP
-1495, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cremer, Helmuth & Pestieau, Pierre, 2001. "Non-linear taxation of bequests, equal sharing rules and the tradeoff between intra- and inter-family inequalities," Journal of Public Economics, Elsevier, vol. 79(1), pages 35-53, January.
- Sloan, Frank A. & Thomas J. Hoerger & Gabriel Picone, 1996. "Effects of Strategic Behavior and Public Subsidies on Families' Savings and Long-Term Care Decisions," Working Papers 96-01, Duke University, Department of Economics.
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