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The Challenge of Organizing Elderly Care Programmes: Optimal Policy Design under Complete and Asymmetric Information

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  • Leporatti Lucia

    (Department of Economics and Business Studies, University of Genoa, Via Vivaldi 516126, Genoa, Italy)

  • Montefiori Marcello

    (Department of Economics and Business Studies, University of Genoa, Via Vivaldi 516126, Genoa, Italy)

Abstract

The increasing life expectancy poses challenges on the future sustainability of long-term care services that today strongly depend on informal care provided within the family by working age children. Ongoing social changes are likely to weaken the informal provision of care. The paper derives optimal policies to help the policy-maker to choose innovative and sustainable solutions to support home care, taking into account the severity of health condition and the different opportunity costs of carers. Drawing inspiration from real world policies, the suitable policy combines lump-sum transfers, paid permissions from work and in-kind provisions. In some circumstances, benefits can favour higher rather than lower income individuals. In the context of information asymmetry, the implementation of the second-best outcome requires the level of care of the most subsidized households’ to be forced towards certain targets to avoid adverse selection.

Suggested Citation

  • Leporatti Lucia & Montefiori Marcello, 2020. "The Challenge of Organizing Elderly Care Programmes: Optimal Policy Design under Complete and Asymmetric Information," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-15, January.
    • Handle: RePEc:bpj:bejeap:v:20:y:2020:i:1:p:15:n:12
    DOI: 10.1515/bejeap-2019-0194
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    Cited by:

    1. Qiang Mu & Peng Guo & Ding Wang, 2022. "Optimal Subsidy Support for the Provision of Elderly Care Services in China Based on the Evolutionary Game Analysis," IJERPH, MDPI, vol. 19(5), pages 1-20, February.
    2. Di Novi, Cinzia & Leporatti, Lucia & Levaggi, Rosella & Montefiori, Marcello, 2022. "Adherence during COVID-19: The role of aging and socio-economics status in shaping drug utilization," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 1-14.

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    More about this item

    Keywords

    informal care; home care; ageing; asymmetric information;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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