Subsidies for Elderly Care in Pay-As-You-Go Pension
In economically developed countries, aging of the population with fewer children is progressing. Social security benefits such as pensions and elderly care are increasing. In a society with fewer children, it is difficult for a government to provide sufficient pension benefits for older people if pay-as-you-go pensions are adopted because a decrease in the working population reduces tax revenues to provide pension benefits. Therefore, the pension contribution rate must be increased to provide sufficient pension benefits. This paper demonstrates that an increase in the pension contribution rate can not always raise pension benefits. However, if a government provides a subsidy for elderly care services and if aggregate demand for elderly care services increases, then the pension benefit can always increase because younger people purchase elderly care services and increase the labor supply instead of performing elderly care with their time. Moreover, this paper presents an examination of whether a subsidy for elderly care can raise the level of social welfare or not and shows that the subsidy can raise the social welfare level thanks to an increase in pension benefits.
|Date of creation:||Sep 2013|
|Date of revision:||Sep 2013|
|Contact details of provider:|| Postal: |
Web page: http://www-econ.kwansei.ac.jp/~econ/index_e.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cremer, Helmuth & Roeder, Kerstin, 2011.
"Long-term care policy, myopia and redistribution,"
TSE Working Papers
12-314, Toulouse School of Economics (TSE), revised May 2012.
- Helmuth Cremer & Kerstin Roeder, 2012. "Long-Term Care Policy, Myopia and Redistribution," CESifo Working Paper Series 3843, CESifo Group Munich.
- Cremer, Helmuth & Roeder, Kerstin, 2011. "Long-term care policy, myopia and redistribution," IDEI Working Papers 723, Institut d'Économie Industrielle (IDEI), Toulouse, revised May 2012.
- Mizushima, Atsue, 2009.
"Intergenerational transfers of time and public long-term care with an aging population,"
Journal of Macroeconomics,
Elsevier, vol. 31(4), pages 572-581, December.
- Atsue Mizushima, 2008. "Intergenerational Transfers of Time and Public Long-term Care with an Aging Population," Economics Working Papers ECO2008/36, European University Institute.
- Atsue Mizushima, 2007. "Intergenerational Transfers of Time and Public Long-term Care with an Aging Population," Discussion Papers in Economics and Business 07-04, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
- Pauly, Mark V, 1990. "The Rational Nonpurchase of Long-term-Care Insurance," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 153-68, February.
- Evelyn Korn & Matthias Wrede, 2012. "The Effect of Long-Term-Care Subsidies on Female Labor Supply and Fertility," CESifo Working Paper Series 3931, CESifo Group Munich.
- Tabata, Ken, 2005. "Population aging, the costs of health care for the elderly and growth," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 472-493, September.
- Meckl, Jürgen & Zink, Stefan, 2001.
"Solow and heterogeneous labor: A neoclassical explanation of wage inequality,"
Discussion Papers, Series I
312, University of Konstanz, Department of Economics.
- Jürgen Meckl & Stefan Zink, 2004. "Solow and heterogeneous labour: a neoclassical explanation of wage inequality," Economic Journal, Royal Economic Society, vol. 114(498), pages 825-843, October.
- Meckl, Jürgen & Zink, Stefan, 2002. "Solow and Heterogeneous Labor: A Neoclassical Explanation of Wage Inequality," IZA Discussion Papers 668, Institute for the Study of Labor (IZA).
- Miyazawa, Kazutoshi, 2010. "Old age support in kind," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(03), pages 445-472, July.
- Yasuoka, Masaya & Miyake, Atsushi, 2010. "Change in the transition of the fertility rate," Economics Letters, Elsevier, vol. 106(2), pages 78-80, February.
- Ken-ichi Hashimoto & Ken Tabata, 2010. "Population aging, health care, and growth," Journal of Population Economics, Springer, vol. 23(2), pages 571-593, March.
When requesting a correction, please mention this item's handle: RePEc:kgu:wpaper:109. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Toshihiro Okada)
If references are entirely missing, you can add them using this form.