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Private, social and self insurance for longterm care: a political economy analysis

  • De Donder, Philippe
  • Pestieau, Pierre

We study the political determination of the level of social long-term care insurance when voters also choose private insurance and saving amounts. Agents di§er in income, probability of becoming dependent and of receiving family help. Social insurance redistributes across income and risk levels, while private insurance is actuarially fair. The income-to-risk ratio of agents determines whether they prefer social or private insurance. Family support crowds out the demand for both social and, especially, private insurance, as strong prospects of family help drive the demand for private insurance to zero. The availability of private insurance decreases the demand for social insurance but need not decrease its majority chosen leve

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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 719.

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Date of creation: Dec 2011
Date of revision: Jun 2014
Publication status: Published in Journal of Public Economic Theory, 2015.
Handle: RePEc:ide:wpaper:25821
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