The Nexus between Long-term Care Insurance, Formal Care, Informal Care, and Bequests: The Case of Japan

Charles Yuji Horioka, Emin Gahramanov and Xueli Tang
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Charles Yuji Horioka: Research Institute for Economics & Business Administration (RIEB), Kobe University, Institute of Social and Economic Research, Osaka University, Asian Growth Research Institute, and National Bureau of Economic Research, JAPAN

No DP2024-24, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: The purpose of this paper is to conduct a theoretical and empirical analysis of the nexus between long-term care insurance (LTCI), formal care, informal (family) care, and bequests. In our empirical analysis, we use micro data from the Japan Household Panel Survey on Consumer Preferences and Satisfaction (JHPS-CPS), formerly known as the Preference Parameter Study, conducted by Osaka University. Japan is an interesting case to analyze because a public LTCI system was introduced there in 2000. Our analysis shows that, in the case of Japan, if parents are eligible for public LTCI benefits, their children will be less likely to be their primary caregiver and that this, in turn, will reduce their children's perceived likelihood of receiving a bequest from them. This result implies that bequests are selfishly or strategically motivated (i.e., that parents leave bequests to their children in order to elicit care from them) and that the introduction of a public LTCI system will reduce the likelihood of children providing care to their parents and through this channel reduce their perceived likelihood of receiving a bequest from them.

Keywords: Altruistic bequests; Bequests; Caregiving; Elderly care; Family care; Formal care; Informal care; Long-term care; Long-term care insurance; Parental care; Selfish bequests; Strategic bequests (search for similar items in EconPapers)
JEL-codes: D11 D12 D15 D64 E21 I13 J14 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024-07
New Economics Papers: this item is included in nep-age and nep-hea
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2024-24.pdf First version, 2024 (application/pdf)

Related works:
Working Paper: The Nexus between Long-term Care Insurance, Formal Care, Informal Care, and Bequests: The Case of Japan (2024)
Working Paper: The Nexus between Long-term Care Insurance, Formal Care, Informal Care, and Bequests: The Case of Japan (2024)
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