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Double Crowding-Out Effects of Means-Tested Public Provision for Long-Term Care

Author

Listed:
  • Christophe Courbage

    (The Geneva Association, 53 route de Malagnou, 1208 Geneva, Switzerland)

  • Peter Zweifel

    (Emeritus, Department of Economics, University of Zurich, Kreuth 371, 9531 Bad Bleiberg, Austria)

Abstract

Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private saving or informal care. This contribution predicts crowding-out effects for both private saving and informal care for policy measures designed to relieve the public purse from LTC expenditure such as more stringent means testing and increased taxation of inheritance. These effects result from the interaction of a parent who decides on the amount of saving in retirement and a caregiver who decides on the effort devoted to informal care which lowers the probability of admission to a nursing home. Double crowding-out effects are also found to be the consequence of exogenous influences, notably a higher opportunity cost of caregiving.

Suggested Citation

  • Christophe Courbage & Peter Zweifel, 2015. "Double Crowding-Out Effects of Means-Tested Public Provision for Long-Term Care," Risks, MDPI, vol. 3(1), pages 1-16, February.
    • Handle: RePEc:gam:jrisks:v:3:y:2015:i:1:p:61-76:d:46137
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    References listed on IDEAS

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    Cited by:

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