Old age or dependence. Which social insurance?

Nishimura, Yukihiro;Pestieau, Pierre
(2020) , 14 pages

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Authors
  • Nishimura, YukihiroGraduate School of Economics, Osaka University, 1-7 Machikaneyama-cho, Toyonaka-shi Osaka, 560-0043, Japan.
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  • Pestieau, PierreUCLouvain
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Abstract
We consider a society where individuals differ according to their productivity and their risk of mortality and dependency. We show that according to the most reasonable estimates of correlations among these three characteristics, if one had to choose between a public pension system and a long-term care social insurance, the latter should be chosen by a utilitarian social planner. With a Rawlsian planner, the balance between the two schemes does depend on the comparison between the ratio of the survival probability to the dependence risk of the poor with its population average.
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Nishimura, Y., & Pestieau, P. (2020). Old age or dependence. Which social insurance? (CORE Discussion Paper 2020/30). https://hdl.handle.net/2078.5/118586