relation: https://publications.ut-capitole.fr/id/eprint/25679/
title: Long-term care policy with nonlinear strategic bequests
creator: Canta, Chiara
creator: Cremer, Helmuth
subject: B- ECONOMIE ET FINANCE
description: 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.
publisher: TSE Working Paper
date: 2017-09
type: Monograph
type: NonPeerReviewed
format: text
language: en
identifier: https://publications.ut-capitole.fr/id/eprint/25679/1/wp_tse_839.pdf
identifier:   Canta, Chiara and Cremer, Helmuth <https://www.idref.fr/058485376>  (2017) Long-term care policy with nonlinear strategic bequests.  TSE Working Paper, n. 17-839, Toulouse     
relation: http://tse-fr.eu/pub/31970
language: en