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Long-Term Care, Altruism and Socialization

Gregory Ponthiere

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Abstract: The public provision of long-term care (LTC) can replace family-provided LTC when adults are not sufficiently altruistic towards their parents. But State intervention can modify the transmission of values and reduce the long-run prevalence of family altruism. To characterize the optimal LTC policy, we develop a three-period OLG model where the adult population is divided into altruistic and non-altruistic agents, and where the transmission of altruism follows a socialization process 'a la Bisin and Verdier (2001, The economics of cultural transmission and the dynamics of preferences. Journal of Economic Theory 97:298-319). It is shown that public LTC benefits, by reducing parental investment in children, make the long-run survival of family altruism less likely. However, whether crowding out arises or not depends on individual preferences and on the socialization mechanism at work. We also study the incompatibility of the optimal short-run LTC benefits with long-run social welfare maximization. Finally, we discuss the robustness of our results to introducing savings and universal LTC benefits.

Keywords: Long-term care; Altruism; Socialization; Optimal policy; Crowding-out effect (search for similar items in EconPapers)
Date: 2013-10
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Citations: View citations in EconPapers (6)

Published in The B.E. journal of economic analysis & policy, 2013, 14 (2), pp.429-471. ⟨10.1515/bejeap-1935-1682-3358⟩

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Journal Article: Long-Term Care, Altruism and Socialization (2013) Downloads
Working Paper: Long-Term Care, Altruism and Socialization (2013)
Journal Article: Long Term Care, Altruism and Socialization (2012) Downloads
Working Paper: Long-Term Care, Altruism and Socialization (2011) Downloads
Working Paper: Long-Term Care, Altruism and Socialization (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00979135

DOI: 10.1515/bejeap-1935-1682-3358

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