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Old age or dependence. Which social insurance?


  • Nishimura, Yukihiro
  • Pestieau, Pierre

    (Université catholique de Louvain, LIDAM/CORE, Belgium)


We consider a society where individuals differ according to their pro- ductivity and their risk of mortality and dependency. We show that ac- cording to the most reasonable estimates of correlations among these three characteristics, if one had to choose between a public pension system and a long-term care social insurance, the latter should be chosen by a utili- tarian social planner. With a Rawlsian planner, the balance between the two schemes does depend on the comparison between the ratio of the sur- vival probability to the dependence risk of the poor with its population average.

Suggested Citation

  • Nishimura, Yukihiro & Pestieau, Pierre, 2020. "Old age or dependence. Which social insurance?," LIDAM Discussion Papers CORE 2020030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2020030

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    References listed on IDEAS

    1. Helmuth Cremer & Jean‐Marie Lozachmeur & Pierre Pestieau, 2010. "Collective Annuities and Redistribution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(1), pages 23-41, February.
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    Cited by:

    1. 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.

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    More about this item


    long term care; pension; mortality risk; optimal taxation; liquidity constraints;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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