Tools
Tools
Canta, Chiara and Cremer, Helmuth
(2017)
Long-term care policy with nonlinear strategic bequests.
TSE Working Paper, n. 17-839, Toulouse
Preview |
Text
Download (581kB) | Preview |
Abstract
We study the design of long-term care (LTC) policy when children differ in their cost of providing informal care. Parents do not observe this cost, but they can commit to a "bequests rule" specifying a transfer conditional on the level of informal care. Care provided by high-cost children is distorted downwards in order to minimize the rent of low-cost ones. Social LTC insurance is designed to maximize a weighted sum of parents' and children's utility. The optimal uniform public LTC provision strikes a balance between insurance and children's utility. Under decreasing absolute risk aversion less than full insurance is provided to mitigate the distortion on informal care which reduces children's rents. A nonuniform policy conditioning LTC benefits on bequests provides full insurance even against the risk of having children with a high cost of providing care. Quite surprisingly the level of informal care induced by the optimal (uniform or nonuniform) policy always increases in the children's' welfare weight.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | September 2017 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Long-term care, informal care, strategic bequests, asymmetric information |
| JEL Classification: | H2 - Taxation, Subsidies, and Revenue H5 - National Government Expenditures and Related Policies J14 - Economics of the Elderly; Economics of the Handicapped |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 16 Apr 2018 15:28 |
| Last Modified: | 02 Apr 2021 15:57 |
| OAI Identifier: | oai:tse-fr.eu:31970 |
| URI: | https://publications.ut-capitole.fr/id/eprint/25679 |
Available Versions of this Item
- Long-term care policy with nonlinear strategic bequests. (deposited 16 Apr 2018 15:28) [Currently Displayed]
