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Social long-term care insurance with two-sided altruism

Helmuth Cremer, Pierre Pestieau and Kerstin Roeder ()

No 15-593, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: This paper studies the design of a social long-term care (LTC) insurance when altruism is two-sided. The laissez-faire solution is not efficient, unless there is perfect altruism. Under full information, the rst-best can be decentralized by a linear subsidy on informal aid, a linear tax on bequests when the parent is dependent and state specic lump-sum transfers which provide insurance. We also study a second-best scheme comprising a LTC benet, a payroll tax on childrens earnings and an inheritance tax. This scheme redistributes resources across individuals and between the states of nature and the tax on childrens labor enhances informal care to compensate for the childrens possible less than full altruism.

Keywords: Long-term care; Two-sided altruism (search for similar items in EconPapers)
JEL-codes: H2 H5 (search for similar items in EconPapers)
Date: 2015-07
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Related works:
Journal Article: Social long-term care insurance with two-sided altruism (2016) Downloads
Working Paper: Social Long-term Care Insurance with Two-sided Altruism (2016)
Working Paper: Social long-term care insurance with two-sided altruism (2015) Downloads
Working Paper: Social long-term care insurance with two-sided altruism (2015) Downloads
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