Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance

Thorben Korfhage

No 1051, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: In this paper, I estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. I find that informal elderly care has adverse and persistent effects on labor market outcomes and therefore negatively affects lifetime earnings, future pension benefits, and individuals’ well-being. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that, even though fiscally costly, public long-term care insurance can offset the personal costs of caregiving to a large extent – in particular for low-income individuals.

Keywords: long-term care; informal care; long-term care insurance; labor supply; retirement; pension benefits; structural model (search for similar items in EconPapers)
JEL-codes: I18 I38 J14 J22 J26 (search for similar items in EconPapers)
Pages: 50 p.
Date: 2019
New Economics Papers: this item is included in nep-age, nep-dge, nep-eur, nep-ias and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Long-run consequences of informal elderly care and implications of public long-term care insurance (2019)
Working Paper: Long-run consequences of informal elderly care and implications of public long-term care insurance (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp1051

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