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Long-Term Care, Altruism and Socialization

  • Grégory Ponthière

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)

The public provision of long-term care (LTC) can replace family-provided LTC when adults are not sufficiently altruistic towards their elderly parents. But State intervention can also modify the transmission of values and reduce the long-run prevalence of family altruism in the population. That evolutionary effect questions the desirability of the LTC public provision. To characterize the optimal LTC policy, we develop a three-period OLG model where the population is divided into altruistic and non-altruistic agents, and where the transmission of (non) altruism takes place through a socialization process à la Bisin and Verdier (2001). The optimal short-run and long-run LTC policies are shown to differ, to an extent varying with the particular socialization mechanism at work.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00622385.

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Date of creation: Sep 2011
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Handle: RePEc:hal:psewpa:halshs-00622385
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  1. Grégory Ponthière, 2010. "Unequal Longevities and Lifestyles Transmission," Post-Print halshs-00754479, HAL.
  2. 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).
  3. Javier Olivera, 2013. "Old-age Support and Demographic Transition in Developing Countries. A Cultural Transmission Model," Working Papers 201307, Geary Institute, University College Dublin.
  4. PESTIEAU, Pierre & PONTHIERE, Grégory, 2010. "Long term care insurance puzzle," CORE Discussion Papers 2010023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Hoerger, Thomas J. & Picone, Gabriel & Sloan, Frank, 1995. "Public Subsidies, Private Provision of Care, and Living Arrangements of the Elderly," Working Papers 95-22, Duke University, Department of Economics.
  6. Jeffrey R. Brown & Amy Finkelstein, 2004. "Supply or Demand: Why is the Market for Long-Term Care Insurance So Small?," NBER Working Papers 10782, National Bureau of Economic Research, Inc.
  7. Sloan, Frank & Gabriel Picone & Thomas J. Hoerger, 1995. "The Supply of Children's Time to Disabled Elderly Parents," Working Papers 95-46, Duke University, Department of Economics.
  8. Jeffrey R. Brown & Amy Finkelstein, 2004. "The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market," NBER Working Papers 10989, National Bureau of Economic Research, Inc.
  9. Pierre Pestieau & Motohiro Sato, 2008. "Long-Term Care: the State, the Market and the Family," Economica, London School of Economics and Political Science, vol. 75(299), pages 435-454, 08.
  10. Sloan, Frank A & Norton, Edward C, 1997. "Adverse Selection, Bequests, Crowding Out, and Private Demand for Insurance: Evidence from the Long-Term Care Insurance Market," Journal of Risk and Uncertainty, Springer, vol. 15(3), pages 201-19, December.
  11. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
  12. Norton, Edward C., 2000. "Long-term care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 17, pages 955-994 Elsevier.
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