UZH-Logo

Maintenance Infos

Long-term care insurance in a two-generation model


Zweifel, Peter; Strüwe, Wolfram (1998). Long-term care insurance in a two-generation model. Journal of Risk and Insurance, 65(1):13-32.

Abstract

The purpose of this contribution is to investigate why private insurance of the risk of long-term care (LTC) has known little market success in major industrialized countries, even among the relatively well-to-do. Using a principal-agent framework, it shows that the purchase of LTC insurance by the parent (the principal) is likely to diminish the amount of LTC provided by the major caregivers; namely children earning a comparatively low wage in the labor market. Anticipating this moral hazard effect, the parent is predicted to renounce the purchase of LTC coverage in many cases. This finding throws serious doubts on the welfare effects of recent moves to introduce compulsory social LTC insurance, as, for example, in Germany.

The purpose of this contribution is to investigate why private insurance of the risk of long-term care (LTC) has known little market success in major industrialized countries, even among the relatively well-to-do. Using a principal-agent framework, it shows that the purchase of LTC insurance by the parent (the principal) is likely to diminish the amount of LTC provided by the major caregivers; namely children earning a comparatively low wage in the labor market. Anticipating this moral hazard effect, the parent is predicted to renounce the purchase of LTC coverage in many cases. This finding throws serious doubts on the welfare effects of recent moves to introduce compulsory social LTC insurance, as, for example, in Germany.

Citations

18 citations in Web of Science®
23 citations in Scopus®
Google Scholar™

Altmetrics

Additional indexing

Item Type:Journal Article, refereed
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:1998
Deposited On:11 Feb 2008 12:21
Last Modified:05 Apr 2016 12:17
Publisher:Wiley-Blackwell
ISSN:0022-4367
Publisher DOI:10.2307/253489
Related URLs:http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=572836&loginpage=Login.asp&site=ehost-live

Download

Full text not available from this repository.View at publisher

TrendTerms

TrendTerms displays relevant terms of the abstract of this publication and related documents on a map. The terms and their relations were extracted from ZORA using word statistics. Their timelines are taken from ZORA as well. The bubble size of a term is proportional to the number of documents where the term occurs. Red, orange, yellow and green colors are used for terms that occur in the current document; red indicates high interlinkedness of a term with other terms, orange, yellow and green decreasing interlinkedness. Blue is used for terms that have a relation with the terms in this document, but occur in other documents.
You can navigate and zoom the map. Mouse-hovering a term displays its timeline, clicking it yields the associated documents.

Author Collaborations