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Long term care insurance and family norms

Author

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  • CANTA, Chiara

    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve)

  • PESTIEAU, Pierre

    (Université de Liège, B-4000 Liège; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve; PSE, CEPR; CESifo and IZA)

Abstract

Long term care (LTC) is mainly provided by the family and subsidiarily by the market and the government. To understand the role of these three institutions it is important to understand the motives and the working of family solidarity. In this paper we focus on the case when LTC is provided by children to their dependent parents out of some norm that has been inculcated to them during their childhood by some exemplary behavior of their parents towards their own parents. In the first part, we look at the interaction between the family and the market in providing for LTC. The key parameters are the probability of dependence, the probability of having a norm-abiding child and the loading factor. In the second part, we introduce the government which has a double mission: correct for a prevailing externality and redistribute resources across heterogeneous households.

Suggested Citation

  • CANTA, Chiara & PESTIEAU, Pierre, 2012. "Long term care insurance and family norms," LIDAM Discussion Papers CORE 2012017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2012017
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    References listed on IDEAS

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    1. Kotlikoff, Laurence J & Spivak, Avia, 1981. "The Family as an Incomplete Annuities Market," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 372-391, April.
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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. Canta, Chiara & Cremer, Helmuth, 2019. "Long-term care policy with nonlinear strategic bequests," European Economic Review, Elsevier, vol. 119(C), pages 548-566.
    3. Klimaviciute, Justina & Pestieau, Pierre, 2022. "The economics of long-term care. An overview," LIDAM Discussion Papers CORE 2022004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Thibault, Emmanuel, 2016. "Demonstration effect and dynamic efficiency," Economics Letters, Elsevier, vol. 147(C), pages 42-45.
    5. Cremer, Helmuth & Roeder, Kerstin, 2013. "Long-Term Care and Lazy Rotten Kids," IZA Discussion Papers 7565, Institute of Labor Economics (IZA).
    6. 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.
    7. repec:bla:annpce:v:89:y:2018:i:1:p:49-63 is not listed on IDEAS
    8. Justina Klimaviciute & Pierre Pestieau & Jérôme Schoenmaeckers, 2020. "Long‐Term Care Insurance With Family Altruism: Theory and Empirics," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(4), pages 895-918, December.
    9. Sudipto Bhattacharya & Claude d’Aspremont & Sergei Guriev & Debapriya Sen & Yair Tauman, 2014. "Cooperation in R&D: Patenting, Licensing, and Contracting," International Series in Operations Research & Management Science, in: Kalyan Chatterjee & William Samuelson (ed.), Game Theory and Business Applications, edition 2, chapter 0, pages 265-286, Springer.
    10. Achim Kemmerling & Michael Neugart, 2019. "Redistributive pensions in the developing world," Review of Development Economics, Wiley Blackwell, vol. 23(2), pages 702-726, May.
    11. 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).
    12. CREMER, Helmuth & PESTIEAU, Pierre & PONTHIERE, Grégory, 2012. "The economics of long-term care: a survey," LIDAM Discussion Papers CORE 2012030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Yakita, Akira, 2019. "Optimal long-term care policy in an intergenerational exchange setting," Research in Economics, Elsevier, vol. 73(4), pages 321-328.

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    More about this item

    Keywords

    norm transmission; long term care; health insurance; optimal taxation;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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