Canta, Chiara and Cremer, Helmuth (2022) Family bargaining and the gender gap in informal care. TSE Working Paper, n. 2022-1352, Toulouse.

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Abstract

We study the optimal long-term care policy when informal care can be provided by
children in exchange for monetary transfers by their elderly parents. We consider a
bargaining model with single-child families. Daughters have a lower labor market wage
and a lower bargaining power within the family with respect to sons. Consequently,
they provide more informal care and have lower welfare in the laissez-faire (although
not necessarily lower transfers). The first best involves redistribution from families with
sons to families with daughters and can be implemented by a gender-speci.c schedule
of public LTC benefits and transfers to working children. If the policy is restricted
to be gender neutral, we find that the informal care provided by daughters should be
distorted up to enhance redistribution from families with sons to families with daughters.
Transfers within the family should be distorted in both types of families.