Long-Term Care Insurance With Family Altruism: Theory and Empirics

This article studies long-term care (LTC) insurance in the presence of family altruism. We first explore whether family solidarity affects the application of Arrow’s (1963) deductible theorem, shown to apply in models without family in earlier work. We find that Arrow’s theorem generally holds, but departures from the standard model exist. Our analysis highlights complex interplay between parents’ insurance and children’s aid, implying that some intuitive conjectures are not always verified. For instance, while one expects deductible to increase with children’s altruism, this is unambiguously confirmed only under certain conditions. We then study empirically the relation between LTC insurance and children’s altruism using data from “Health and Retirement Study” (HRS)

Altruism and long-term care insurance

The aim of this paper is to analyze long-term care (LTC) insurance purchase decisions when parents expect to receive assistance from altruistic children. We first propose a simple theoretical model in which we show that the effect of children's altruism on parents'insurance decision is ambiguous and depends on a number of factors: the degree of substitutability between informal and formal care, the degree of parental altruism and the concavity of the utility functions. We then run an empirical test using data from the US, France, Spain, Germany and Israel. We find that the effect of children's altruism is negative in the US and Israel, but not significant in France, Germany and Spain, which possibly suggests that the different forces identified in the theoretical model are offsetting each other

Long-term care insurance with family altruism: Theory and empirics

This paper studies long-term care (LTC) insurance in the presence of family altruism. In the first, theoretical, part of the paper, we explore whether and how family solidarity affects the application to LTC of Arrow's (1963) theorem of the deductible, which is shown to apply in models without family by a number of papers. We consider two types of family altruism, perfect and imperfect, and find that Arrow's theorem generally holds, even though some departures from the standard model and some differences between the types of altruism exist. Our analysis highlights a complex interplay between parents' insurance and their children's aid, which implies that a number of intuitive conjectures are not always verified. For instance, while one would expect the deductible to be increasing in the child's degree of altruism, this is unambiguously verified only under certain conditions. Given the ambiguity of some results, in the second part of the paper we resort, more generally, to an empirical test of the relation between LTC insurance and children's altruism using the data from the Health and Retirement Study (HRS). Our findings suggest that children's altruism has a negative impact on parents' LTC insurance purchases, even though some results also point to this relationship being more complex than one might think

Long‐Term Care Insurance With Family Altruism: Theory and Empirics

peer reviewedThis article studies long-term care (LTC) insurance in the presence of family altruism. We first explore whether family solidarity affects the application of Arrow's (1963) deductible theorem, shown to apply in models without family in earlier work. We find that Arrow's theorem generally holds, but departures from the standard model exist. Our analysis highlights complex interplay between parents' insurance and children's aid, implying that some intuitive conjectures are not always verified. For instance, while one expects deductible to increase with children's altruism, this is unambiguously confirmed only under certain conditions. We then study empirically the relation between LTC insurance and children’s altruism using data from Health and Retirement Study (HRS)

Nursing homes and mortality in Europe: Uncertain causality

International audienceThe current health crisis has particularly affected the elderly population. Nursing homes have unfortunately experienced a relatively large number of deaths. On the basis of this observation and working with European data (from SHARE), we want to check whether nursing homes were lending themselves to excess mortality even before the pandemic. Controlling for a number of important characteristics of the elderly population in and outside nursing homes, we conjecture that the difference in mortality between those two samples is to be attributed to the way nursing homes are designed and organized. Using matching methods, we observe excess mortality in Sweden, Belgium, Germany, Switzerland, Czech Republic and Estonia but not in the Netherlands, Denmark, Austria, France, Luxembourg, Italy and Spain. This raises the question of the organization and management of these nursing homes, but also of their design and financing