Long-term Care: Is There Crowding Out of Informal Care, Private Insurance as Well as Saving?
Friday, January 8, 201612:00 PM - 1:15 PM (Pacific)
Encina Hall, Third Floor, Central, C330
616 Jane Stanford Way, Stanford, CA 94305
Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private LTC insurance (Brown and Finkelstein, 2008), private saving (Gruber and Yelowitz, 1999; Sloan and Norton, 1997), or informal care (Pauly, 1990; Zweifel and Strüwe, 1997). This contribution predicts crowding-out effects for both private LTC insurance and informal care on the one hand and private saving and informal care on the other. These effects result from the interaction of a parent who decides about private LTC insurance before retirement and the amount of saving in retirement and a caregiver who decides about effort devoted to informal care. Some of the predictions are tested using a recent survey from China.