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Long-term care and births timing

Listed author(s):
  • Pierre Pestieau

    (CEPR - Center for Economic Policy Research - CEPR, CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Grégory Ponthière

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

Due to the ageing process, the provision of long-term care (LTC) to the dependent elderly has become a major challenge of our epoch. But at the same time, our societies are characterized, since the 1970s, by a significant postponement of births. This paper aims at examining the impact of those demographic trends on the optimal family policy. We develop a four-period OLG model where individuals, who receive children's informal LTC at the old age, must choose, when being young, how to allocate births along their lifecycle. It is shown that early children provide more LTC to their elderly parents than late children, because of the lower opportunity cost of providing LTC when being retired. In comparison with the social optimum, individuals have, at the laissez-faire, too few children early in their life, and too many later on in their life. The decentralization of the first-best optimum requires thus to subsidize early births. We study also the design of the optimal subsidy on early births in a second-best setting. Its level depends on efficiency and equity issues, as well as on its incidence on the long-run population composition and on LTC provision.

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File URL: https://halshs.archives-ouvertes.fr/halshs-01131236/document
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Paper provided by HAL in its series PSE Working Papers with number halshs-01131236.

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Date of creation: Mar 2015
Handle: RePEc:hal:psewpa:halshs-01131236
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01131236
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References listed on IDEAS
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  1. Pierre Pestieau & Gregory Ponthiere, 2013. "Childbearing Age, Family Allowances, and Social Security," Southern Economic Journal, Southern Economic Association, vol. 80(2), pages 385-413, October.
  2. Bernard van den Berg & Han Bleichrodt & Louis Eeckhoudt, 2005. "The economic value of informal care: a study of informal caregivers' and patients' willingness to pay and willingness to accept for informal care," Health Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 363-376.
  3. Liliana Pezzin & Robert Pollak & Barbara Schone, 2009. "Long-term care of the disabled elderly: do children increase caregiving by spouses?," Review of Economics of the Household, Springer, vol. 7(3), pages 323-339, September.
  4. Cigno, Alessandro & Ermisch, John, 1989. "A microeconomic analysis of the timing of births," European Economic Review, Elsevier, vol. 33(4), pages 737-760, April.
  5. Pierre Pestieau & Gregory Ponthiere, 2015. "Optimal life-cycle fertility in a Barro-Becker economy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(1), pages 45-87, January.
  6. Roméo Fontaine & Agnès Gramain & Jérôme Wittwer, 2007. "Les configurations d'aide familiales mobilisées autour des personnes âgées dépendantes en Europe," Économie et Statistique, Programme National Persée, vol. 403(1), pages 97-115.
  7. Wakabayashi, Midori & Horioka, Charles Yuji, 2009. "Is the eldest son different? The residential choice of siblings in Japan," Japan and the World Economy, Elsevier, vol. 21(4), pages 337-348, December.
  8. Korn Evelyn & Wrede Matthias, 2013. "Working Mums and Informal Care Givers: The Anticipation Effect," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 473-498, July.
  9. CREMER, Helmuth & PESTIEAU, Pierre & PONTHIERE, Grégory, "undated". "The economics of long-term care: a survey," CORE Discussion Papers RP 2466, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Ronald Lee, 2003. "The Demographic Transition: Three Centuries of Fundamental Change," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 167-190, Fall.
  11. Cremer, Helmuth & Roeder, Kerstin, 2013. "Long-term care policy, myopia and redistribution," Journal of Public Economics, Elsevier, vol. 108(C), pages 33-43.
  12. Young Kyung Do & Edward C. Norton & Sally C. Stearns & Courtney Harold Van Houtven, 2015. "Informal Care and Caregiver's Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(2), pages 224-237, 02.
  13. Pierre Pestieau & Gregory Ponthiere, 2014. "Optimal fertility along the life cycle," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(1), pages 185-224, January.
  14. Kai A. Konrad & Harald Künemund & Kjell Erik Lommerud & Julio R. Robledo, 2002. "Geography of the Family," American Economic Review, American Economic Association, vol. 92(4), pages 981-998, September.
  15. d'Albis, Hippolyte & Augeraud-Véron, Emmanuelle & Schubert, Katheline, 2010. "Demographic-economic equilibria when the age at motherhood is endogenous," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1211-1221, November.
  16. Pierre Pestieau & Motohiro Sato, 2006. "Long term care: the state and the family," Annals of Economics and Statistics, GENES, issue 83-84, pages 151-166.
  17. 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.
  18. repec:adr:anecst:y:2006:i:83-84 is not listed on IDEAS
  19. Liliana E. Pezzin & Robert A. Pollak & Barbara S. Schone, 2007. "Efficiency in Family Bargaining: Living Arrangements and Caregiving Decisions of Adult Children and Disabled Elderly Parents," CESifo Economic Studies, CESifo, vol. 53(1), pages 69-96, March.
  20. repec:eee:pubeco:v:151:y:2017:i:c:p:12-24 is not listed on IDEAS
  21. Siv Gustafsson, 2001. "Optimal age at motherhood. Theoretical and empirical considerations on postponement of maternity in Europe," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(2), pages 225-247.
  22. 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.
  23. CREMER, Helmuth & gahvari, Firouz & PESTIEAU, Pierre, 2013. "Uncertain altruism and the provision of long term care," CORE Discussion Papers 2013047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  24. repec:dau:papers:123456789/1801 is not listed on IDEAS
  25. Roméo Fontaine & Agnès Gramain & Jérôme Wittwer, 2007. "Les configurations d'aide familiales mobilisées autour des personnes âgées dépendantes en Europe," Post-Print halshs-00705566, HAL.
  26. 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 1-1, March.
  27. repec:adr:anecst:y:2006:i:83-84:p:06 is not listed on IDEAS
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