Arbeitspapier

Indirect fiscal effects of long-term care insurance

Informal care by close family members is the main pillar of most longterm care systems. However, due to demographic ageing the need for long-term care is expected to increase while the informal care potential is expected to decline. From a budgetary perspective, informal care is often viewed as a cost-saving alternative to subsidized formal care. This view, however neglects that many family carers are of working age and face the difficulty to reconcile care and paid work which might entail sizable indirect fiscal effects related to forgone tax revenues, lower social security contributions and higher transfer payments. In this paper we use a structural model of labor supply and the choice of care arrangement to quantify these indirect fiscal effects of informal care. Moreover based on the model we discuss the fiscal effects related to non-take up of formal care.

Language
Englisch

Bibliographic citation
Series: DIW Discussion Papers ; No. 1520

Classification
Wirtschaft
Time Allocation and Labor Supply
Fiscal Policies and Behavior of Economic Agents: Household
Health Insurance, Public and Private
Subject
labor supply
long-term care
long-term care insurance
structural model

Event
Geistige Schöpfung
(who)
Geyer, Johannes
Haan, Peter
Korfhage, Thorben
Event
Veröffentlichung
(who)
Deutsches Institut für Wirtschaftsforschung (DIW)
(where)
Berlin
(when)
2015

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Geyer, Johannes
  • Haan, Peter
  • Korfhage, Thorben
  • Deutsches Institut für Wirtschaftsforschung (DIW)

Time of origin

  • 2015

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