[Seminaire CREM] Présentation de Pierre PESTIEAU, Professeur émérite Université de Liège
Public pensions and LTC insurance with family solidarity
Abstract:
As income rises, the risk of disability in old age declines, while life expectancy increases. These correlations strengthen the case for public long-term care (LTC) insurance over public pension systems. However, this perspective shifts when considering family solidarity—specifically, the informal care provided by spouses and children to elderly relatives. When viewed through the lens of altruistic caregiving motives, the argument for social LTC insurance becomes more nuanced. The interplay between formal and informal care is a key factor in shaping optimal policy. In this paper, we demonstrate that when family members reliably provide informal care, the design of a comprehensive public LTC system depends on the existence of a private insurance and on the degree of substitutability between informal and formal care.
