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Fiscal Incidence When Both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home -care for the Elderly


  • Haizhen Mou


  • Stanley L. Winer



Demographic ageing in Western countries has increased the pressure on children of elderly parents to provide care privately as an alternative to more costly institutionalization, and this pressure is likely to intensify. While some papers have recently investigated the optimal structure of family policy in this context, there is little work so far on the distributional impact of programs whose purpose is to subsidize the care of seniors who remain at home. We investigate analytically and with simulation the measureme nt of the fiscal incidence of programs that subsidize home care for the elderly, when both individual welfare and family structure matter. The definition of welfare incidence, the comparison of welfare-based incidence with budgetary incidence for non-cooperative and cooperative families, and the calculation of the shifting of program benefits between family members, some of whom may be altruistic, are key issues in the analysis. The integration of individual welfare, family structure and benefit shifting provides a new perspective on the study of the distributional consequences of home-care programs.

Suggested Citation

  • Haizhen Mou & Stanley L. Winer, 2010. "Fiscal Incidence When Both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home -care for the Elderly," ICER Working Papers 15-2010, ICER - International Centre for Economic Research.
  • Handle: RePEc:icr:wpicer:15-2010

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    References listed on IDEAS

    1. Stabile, Mark & Laporte, Audrey & Coyte, Peter C., 2006. "Household responses to public home care programs," Journal of Health Economics, Elsevier, vol. 25(4), pages 674-701, July.
    2. 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.
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    Cited by:

    1. Barbora Slintáková, 2014. "Cost of Service Approach to the Measurement of Public Expenditure Incidence," Český finanční a účetní časopis, University of Economics, Prague, vol. 2014(2), pages 92-105.

    More about this item


    home care subsidy; fiscal incidence; family structure; altruism; shifting;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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