Long-term care and births timing

Pierre Pestieau and Gregory Ponthiere

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: Due to the aging process, the provision of long-term care (LTC) to the dependent elderly has become a major challenge of our epoch. But our societies are also characterized, since the 1970s, by a postponement of births, which, by raising the intergenerational age gap, can affect the provision of LTC by children. In order to examine the impact of those demographic trends on the optimal 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 life cycle. It is shown that, in line with empirical evidence, early children provide more LTC to their elderly parents than do late children, because they face a lower opportunity cost of providing LTC. When comparing the laissez-faire with the long-run social optimum, it appears that individuals have, at the laissez-faire, too few early births, and too many late births. We then study, in first-best and second-best settings, how the social optimum can be decentralized by encouraging early births, in such a way as to reduce the social burden of LTC provision.

Keywords: Long term care; Birth timing; Childbearing age; Family policy; OLG models (search for similar items in EconPapers)
Date: 2016-12
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in Journal of Health Economics, 2016, 50, pp.340-357. ⟨10.1016/j.jhealeco.2016.08.009⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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 (2015)
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:pseptp:halshs-01509670

DOI: 10.1016/j.jhealeco.2016.08.009

Access Statistics for this paper

More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL
Bibliographic data for series maintained by Caroline Bauer ().