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Risks 2015, 3(1), 61-76; doi:10.3390/risks3010061

Double Crowding-Out Effects of Means-Tested Public Provision for Long-Term Care

1
The Geneva Association, 53 route de Malagnou, 1208 Geneva, Switzerland
2
Emeritus, Department of Economics, University of Zurich, Kreuth 371, 9531 Bad Bleiberg, Austria
*
Author to whom correspondence should be addressed.
Academic Editor: Georges Dionne
Received: 3 December 2014 / Accepted: 4 February 2015 / Published: 25 February 2015
(This article belongs to the Special Issue Information and market efficiency)
View Full-Text   |   Download PDF [669 KB, uploaded 25 February 2015]

Abstract

Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private saving or informal care. This contribution predicts crowding-out effects for both private saving and informal care for policy measures designed to relieve the public purse from LTC expenditure such as more stringent means testing and increased taxation of inheritance. These effects result from the interaction of a parent who decides on the amount of saving in retirement and a caregiver who decides on the effort devoted to informal care which lowers the probability of admission to a nursing home. Double crowding-out effects are also found to be the consequence of exogenous influences, notably a higher opportunity cost of caregiving. View Full-Text
Keywords: long-term care; crowding out; informal care; saving; means testing long-term care; crowding out; informal care; saving; means testing
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Courbage, C.; Zweifel, P. Double Crowding-Out Effects of Means-Tested Public Provision for Long-Term Care. Risks 2015, 3, 61-76.

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