Social long-term care insurance with two-sided altruism

Cremer, Helmuth, Pestieau, Pierre and Roeder, Kerstin (2016) Social long-term care insurance with two-sided altruism. Research in Economics, vol.70. pp. 101-109.

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Official URL: http://tse-fr.eu/pub/30379

Abstract

This paper studies the design of a social long-term care (LTC) insurance when altruism is two-sided. The laissez-faire solution is not efficient, unless there is perfect altruism. Under full information, the rst-best can be decentralized by a linear subsidy on informal aid, a linear tax on bequests when the parent is dependent and state specic lump-sum transfers which provide insurance. We also study a second-best scheme comprising a LTC benet, a payroll tax on childrens earnings and an inheritance tax. This scheme redistributes resources across individuals and between the states of nature and the tax on childrens labor enhances informal care to compensate for the childrens possible less than full altruism.

Item Type: Article
Language: English
Date: 2016
Refereed: Yes
Uncontrolled Keywords: Long-term care, Two-sided altruism
JEL codes: H2 - Taxation, Subsidies, and Revenue
H5 - National Government Expenditures and Related Policies
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 19 Apr 2016 12:26
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:30379
URI: http://publications.ut-capitole.fr/id/eprint/20315

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