Long-term care and births timing

Pierre Pestieau and Gregory Ponthiere

PSE Working Papers from HAL

Abstract: Due to the ageing process, the provision of long-term care (LTC) to the dependent elderly has become a major challenge of our epoch. But at the same time, our societies are characterized, since the 1970s, by a significant postponement of births. This paper aims at examining the impact of those demographic trends on the optimal family policy. We develop a four-period OLG model where individuals, who receive children's informal LTC at the old age, must choose, when being young, how to allocate births along their lifecycle. It is shown that early children provide more LTC to their elderly parents than late children, because of the lower opportunity cost of providing LTC when being retired. In comparison with the social optimum, individuals have, at the laissez-faire, too few children early in their life, and too many later on in their life. The decentralization of the first-best optimum requires thus to subsidize early births. We study also the design of the optimal subsidy on early births in a second-best setting. Its level depends on efficiency and equity issues, as well as on its incidence on the long-run population composition and on LTC provision.

Keywords: Long term care; birth timing; childbearing age; family policy; OLG models (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-age and nep-hea
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01131236v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://shs.hal.science/halshs-01131236v1/document (application/pdf)

Related works:
Journal Article: Long-term care and births timing (2016)
Working Paper: Long-Term Care and Births Timing (2016)
Working Paper: Long-term care and births timing (2016)
Working Paper: Long-term care and births timing (2016)
Working Paper: Long-Term Care and Births Timing (2015)
Working Paper: Long-term care and births timing (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:psewpa:halshs-01131236

Access Statistics for this paper

More papers in PSE Working Papers from HAL
Bibliographic data for series maintained by CCSD ().