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Fiscal Incidence When Both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home -care for the Elderly

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  • Haizhen Mou
  • Stanley L. Winer
Abstract
Demographic ageing in Western countries has increased the pressure on children of elderly parents to provide care privately as an alternative to more costly institutionalization, and this pressure is likely to intensify. While some papers have recently investigated the optimal structure of family policy in this context, there is little work so far on the distributional impact of programs whose purpose is to subsidize the care of seniors who remain at home. We investigate analytically and with simulation the measureme nt of the fiscal incidence of programs that subsidize home care for the elderly, when both individual welfare and family structure matter. The definition of welfare incidence, the comparison of welfare-based incidence with budgetary incidence for non-cooperative and cooperative families, and the calculation of the shifting of program benefits between family members, some of whom may be altruistic, are key issues in the analysis. The integration of individual welfare, family structure and benefit shifting provides a new perspective on the study of the distributional consequences of home-care programs.

Suggested Citation

  • Haizhen Mou & Stanley L. Winer, 2010. "Fiscal Incidence When Both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home -care for the Elderly," ICER Working Papers 15-2010, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:15-2010
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    Cited by:

    1. 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.
    2. Masaya Yasuoka, 2014. "Financing Elderly Care Service Subsidies horizontally differentiated duopoly," Discussion Paper Series 122, School of Economics, Kwansei Gakuin University, revised Oct 2014.
    3. Barbora Slintáková, 2014. "Cost of Service Approach to the Measurement of Public Expenditure Incidence [Nákladový přístup k měření dopadu veřejných výdajů]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2014(2), pages 92-105.

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    More about this item

    Keywords

    home care subsidy; fiscal incidence; family structure; altruism; shifting;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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