Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265912 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9877
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study the optimal long-term care policy when informal care can be provided by children in exchange for monetary transfers by their elderly parents. We consider a bargaining model with single-child families. Daughters have a lower labor market wage and a lower bargaining power within the family with respect to sons. Consequently, they provide more informal care and have lower welfare in the laissez-faire (although not necessarily lower transfers). The first best involves redistribution from families with sons to families with daughters and can be implemented by a gender-specific schedule of public LTC benefits and transfers to working children. If the policy is restricted to be gender neutral, we find that the informal care provided by daughters should be distorted up to enhance redistribution from families with sons to families with daughters. Transfers within the family should be distorted in both types of families.
Subjects: 
long-term care
informal care
strategic bequests
family bargaining
gender-neutrality
JEL: 
D13
H23
H31
I19
Document Type: 
Working Paper
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