Private, social and self insurance for longterm care: a political economy analysis

Résumé

We study the political determination of the level of social long-term care insurance when voters also choose private insurance and saving amounts. Agents di§er in income, probability of becoming dependent and of receiving family help. Social insurance redistributes across income and risk levels, while private insurance is actuarially fair. The income-to-risk ratio of agents determines whether they prefer social or private insurance. Family support crowds out the demand for both social and, especially, private insurance, as strong prospects of family help drive the demand for private insurance to zero. The availability of private insurance decreases the demand for social insurance but need not decrease its majority chosen level.

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Codes JEL

Remplacé par

Philippe De Donder et Pierre Pestieau, « Private, social and self insurance for long-term care in the presence of family help », Journal of Public Economic Theory, vol. 19, n° 1, février 2017, p. 18–37.

Référence

Philippe De Donder et Pierre Pestieau, « Private, social and self insurance for longterm care: a political economy analysis », TSE Working Paper, n° 11-305, décembre 2011, révision juin 2014.