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Related Experiment Videos

On insuring and caring for parents' long-term care needs.

Christophe Courbage¹, Louis Eeckhoudt

¹The Geneva Association, Geneva, Switzerland. christophe_courbage@genevaassociation.org

Journal of Health Economics

|September 15, 2012

Summary

Adult children

Area of Science:

Gerontology
Health Economics
Family Studies

Background:

Adult children often bear financial responsibility for parents' long-term care (LTC).
This financial link creates interest in parents' LTC insurance levels.
Child altruism and parental altruism influence care decisions.

Purpose of the Study:

To determine optimal levels of LTC insurance and informal care.
To analyze the interplay between LTC insurance and informal care decisions when the child is the decision-maker.
To examine the impact of altruism on the relationship between insurance and informal care.

Main Methods:

Economic modeling of optimal decision-making.
Analysis of insurance and informal care choices under varying altruism levels.

Related Experiment Videos

Simulation of exogenous shocks (opportunity cost, wealth, bequests).

Main Results:

The relationship between LTC insurance and informal care can be complementary or substitutable.
Child altruism increases informal care provision when the child controls insurance.
This contrasts with decisions made solely by the elderly parent.

Conclusions:

Child's decision-making power and altruism significantly impact LTC insurance and informal care dynamics.
Optimal LTC planning requires considering the child's role and altruistic motivations.
Exogenous factors like wealth and caregiving costs also influence these intertwined decisions.