IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/0704.html
   My bibliography  Save this paper

Intergenerational Transfers of Time and Public Long-term Care with an Aging Population

Author

Listed:
  • Atsue Mizushima

    (Graduate School of Economics, Osaka University)

Abstract

In this paper, we use a two-period overlapping generations model to examine the behavior of an economy that incorporates intergenerational transfers of time. In the first part, we describe the dynamics and steady state of the economy in which there is no government. We show that the rate of life expectancy has negative impact on the steady-state level of the capital stock. In the second part, we study the role and the effect of public long-term care policy. We also show that public long-term care lowers the steady-state level of the capital stock but enhances the welfare when the rate of tax is small.

Suggested Citation

  • Atsue Mizushima, 2007. "Intergenerational Transfers of Time and Public Long-term Care with an Aging Population," Discussion Papers in Economics and Business 07-04, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0704
    as

    Download full text from publisher

    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0704.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wagstaff, Adam, 1986. "The Demand for Health: A Simplified Grossman Model [On the Concept of Health Capital and the Demand for Health]," Bulletin of Economic Research, Wiley Blackwell, vol. 38(1), pages 93-95, January.
    2. Cardia, Emanuela & Michel, Philippe, 2004. "Altruism, intergenerational transfers of time and bequests," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1681-1701, June.
    3. Heather L. Bednarek & Rowena A. Pecchenino, 2002. "A Macroeconomic Analysis of Publicly Funded Health Care," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(2), pages 243-270, April.
    4. de la Croix, David & Licandro, Omar, 1999. "Life expectancy and endogenous growth," Economics Letters, Elsevier, vol. 65(2), pages 255-263, November.
    5. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    6. Liliana E. Pezzin & Barbara Steinberg Schone, 1999. "Intergenerational Household Formation, Female Labor Supply and Informal Caregiving: A Bargaining Approach," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 475-503.
    7. Jacobson, Lena, 2000. "The family as producer of health -- an extended grossman model," Journal of Health Economics, Elsevier, vol. 19(5), pages 611-637, September.
    8. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
    9. Pecchenino, Rowena A & Pollard, Patricia S, 1997. "The Effects of Annuities, Bequests, and Aging in an Overlapping Generations Model of Endogenous Growth," Economic Journal, Royal Economic Society, vol. 107(440), pages 26-46, January.
    10. repec:bla:jpbect:v:4:y:2002:i:2:p:243-70 is not listed on IDEAS
    11. Darius Lakdawalla & Tomas Philipson, 2002. "The Rise in Old-Age Longevity and the Market for Long-Term Care," American Economic Review, American Economic Association, vol. 92(1), pages 295-306, March.
    12. Futagami, Koichi & Nakajima, Tetsuya, 2001. "Population Aging and Economic Growth," Journal of Macroeconomics, Elsevier, vol. 23(1), pages 31-44, January.
    13. Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2002. "Vintage Human Capital, Demographic Trends, and Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 104(2), pages 340-375, June.
    14. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 1-25.
    15. Morand, Olivier F, 1999. "Endogenous Fertility, Income Distribution, and Growth," Journal of Economic Growth, Springer, vol. 4(3), pages 331-349, September.
    16. Blackburn, Keith & Cipriani, Giam Pietro, 2005. "Intergenerational transfers and demographic transition," Journal of Development Economics, Elsevier, vol. 78(1), pages 191-214, October.
    17. Gronau, Reuben, 1973. "The Intrafamily Allocation of Time: The Value of the Housewives' Time," American Economic Review, American Economic Association, vol. 63(4), pages 634-651, September.
    18. Luisa Fuster, 1999. "Effects of uncertain lifetime and annuity insurance on capital accumulation and growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 13(2), pages 429-445.
    19. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-546, June.
    20. Norton, Edward C., 2000. "Long-term care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 17, pages 955-994, Elsevier.
    21. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    22. Menahem E. Yaari, 1965. "Uncertain Lifetime, Life Insurance, and the Theory of the Consumer," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(2), pages 137-150.
    23. Susan L. Ettner, 1996. "The Opportunity Costs of Elder Care," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 189-205.
    24. M. R. Rosenzweig & Stark, O. (ed.), 1997. "Handbook of Population and Family Economics," Handbook of Population and Family Economics, Elsevier, edition 1, volume 1, number 1.
    25. Abel, Andrew B, 1985. "Precautionary Saving and Accidental Bequests," American Economic Review, American Economic Association, vol. 75(4), pages 777-791, September.
    26. Emanuela Cardia & Serena Ng, 2003. "Intergenerational Time Transfers and Childcare," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(2), pages 431-454, April.
    27. A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1.
    28. Tabata, Ken, 2005. "Population aging, the costs of health care for the elderly and growth," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 472-493, September.
    29. Weil, Philippe, 1987. "Love thy children : Reflections on the Barro debt neutrality theorem," Journal of Monetary Economics, Elsevier, vol. 19(3), pages 377-391, May.
    30. Pezzin, Liliana E & Schone, Barbara Steinberg, 1997. "The Allocation of Resources in Intergenerational Households: Adult Children and Their Elderly Parents," American Economic Review, American Economic Association, vol. 87(2), pages 460-464, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Masaya Yasuoka, 2014. "Financing Elderly Care Service Subsidies horizontally differentiated duopoly," Discussion Paper Series 122, School of Economics, Kwansei Gakuin University, revised Oct 2014.
    2. Ryoji Hasegawa & Masaya Yasuoka, 2020. "Long-term care insurance effects on Japan fs regional economy: an approach linking theoretical with empirical analysis," Discussion Paper Series 209, School of Economics, Kwansei Gakuin University.
    3. Ken Tabata, 2015. "Population Aging and Growth: the Effect of PAYG Pension Reform," Discussion Paper Series 125, School of Economics, Kwansei Gakuin University, revised Jan 2015.
    4. Yasuoka, Masaya, 2020. "Subsidies for elderly care with a pay-as-you-go pension," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    5. Masaya Yasuoka, 2019. "Should Public Elderly Care Be Provided?," Economics Bulletin, AccessEcon, vol. 39(1), pages 564-570.
    6. Masaya Yasuoka, 2019. "Elderly care service in an aging society," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 18-34, January.
    7. Zouhair Aït Benhamou & Lesly Cassin, 2018. "The effects of migration and remittances on development and capital in Caribbean Small Island Developing States," EconomiX Working Papers 2018-41, University of Paris Nanterre, EconomiX.
    8. Miyake, Atsushi & Shintani, Masaya & Yasuoka, Masaya, 2021. "Elderly Care and Informal Family Care," MPRA Paper 110126, University Library of Munich, Germany.
    9. Ken Tabata, 2015. "Population Aging and Growth: The Effect of Pay-as-You-Go Pension Reform," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 71(3), pages 385-406, September.
    10. Shin, Inyong, 2013. "The Effect of Compressed Demographic Transition and Demographic Gift on Economic Growth," MPRA Paper 45003, University Library of Munich, Germany.
    11. Yakita, Akira, 2023. "Elderly long-term care policy and sandwich caregivers’ time allocation between child-rearing and market labor," Japan and the World Economy, Elsevier, vol. 65(C).
    12. OGURO Kazumasa & ISHIDA Ryo & YASUOKA Masaya, 2020. "Elderly Care Supply Systems and Services which Decrease Elderly Care Requirements," Discussion papers 20020, Research Institute of Economy, Trade and Industry (RIETI).
    13. Atsushi Miyake & Masaya Yasuoka, 2016. "Which Should the Government Subsidize: Child Care or Elderly Care?," Discussion Paper Series 144, School of Economics, Kwansei Gakuin University, revised Jun 2016.
    14. Masaya Yasuoka, 2013. "Subsidies for Elderly Care in Pay-As-You-Go Pension," Discussion Paper Series 109, School of Economics, Kwansei Gakuin University, revised Sep 2013.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tabata, Ken, 2005. "Population aging, the costs of health care for the elderly and growth," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 472-493, September.
    2. Atsue Mizushima, 2008. "Population Aging and Economic Growth: the effect of health expenditure," Economics Working Papers ECO2008/35, European University Institute.
    3. Blackburn, Keith & Cipriani, Giam Pietro, 2005. "Intergenerational transfers and demographic transition," Journal of Development Economics, Elsevier, vol. 78(1), pages 191-214, October.
    4. Futagami, Koichi & Sunaga, Miho, 2022. "Risk aversion and longevity in an overlapping generations model," Journal of Macroeconomics, Elsevier, vol. 72(C).
    5. Atsue Mizushima & Keiichi Koda, 2007. "Risk Sharing and Growth in the Gifts Economy," Discussion Papers in Economics and Business 07-02, Osaka University, Graduate School of Economics.
    6. Klaus Prettner & Alexia Prskawetz, 2010. "Demographic change in models of endogenous economic growth. A survey," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(4), pages 593-608, December.
    7. Ben J. Heijdra & Jochen O. Mierau, 2009. "Annuity Market Imperfection, Retirement and Economic Growth," CESifo Working Paper Series 2717, CESifo.
    8. Luciano Fanti & Luca Gori & Fabio Tramontana, 2014. "Endogenous lifetime, accidental bequests and economic growth," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 37(1), pages 81-98, April.
    9. Brito, Paulo, 2014. "Interest rates and endogenous population growth: joint age-dependent dynamics," MPRA Paper 58656, University Library of Munich, Germany.
    10. Jochen Mierau & Stephen Turnovsky, 2014. "Capital accumulation and the sources of demographic change," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 857-894, July.
    11. Raouf Boucekkine & Bity Diene & Theophile Azomahou, 2008. "Growth Economics of Epidemics: A Review of the Theory," Mathematical Population Studies, Taylor & Francis Journals, vol. 15(1), pages 1-26.
    12. Liliana E. Pezzin & Robert A. Pollak & Barbara S. Schone, 2007. "Efficiency in Family Bargaining: Living Arrangements and Caregiving Decisions of Adult Children and Disabled Elderly Parents," CESifo Economic Studies, CESifo Group, vol. 53(1), pages 69-96, March.
    13. Pelgrin, Florian & Venditti, Alain, 2022. "On the long-run fluctuations of inheritance in two-sector OLG models," Journal of Mathematical Economics, Elsevier, vol. 101(C).
    14. Michael Grimm, 2003. "Family and economic growth: A review," Mathematical Population Studies, Taylor & Francis Journals, vol. 10(3), pages 145-173.
    15. Smetters, Kent, 1999. "Ricardian equivalence: long-run Leviathan," Journal of Public Economics, Elsevier, vol. 73(3), pages 395-421, September.
    16. Toshiki Tamai, 2009. "Public Capital, Taxation And Endogenous Growth In A Finite Horizons Model," Metroeconomica, Wiley Blackwell, vol. 60(1), pages 179-196, February.
    17. Mengyuan Zhou, 2019. "The Effect of the Source of Inheritance on Bequest Attitudes: Evidence from Japan," Keio-IES Discussion Paper Series 2019-018, Institute for Economics Studies, Keio University.
    18. Costa-Font, Joan & Jiménez-Martín, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?," Journal of Health Economics, Elsevier, vol. 84(C).
    19. Luciano Fanti & Luca Gori, 2012. "Public Expenditure on Health and Private Old-Age Insurance in an OLG Growth Model with Endogenous Fertility: Chaotic Dynamics Under Perfect Foresight," Computational Economics, Springer;Society for Computational Economics, vol. 40(4), pages 333-353, December.

    More about this item

    Keywords

    time transfers; household production; overlapping generations;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osk:wpaper:0704. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Economic Society of Osaka University (email available below). General contact details of provider: https://edirc.repec.org/data/feosujp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.