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On the impact of long-term care insurance on the behavior of parents and children: theory and evidence on Japan

Horioka, Charles Yuji, Gahramanov, Emin, Tang, Xueli·2025·Review of Economics of the Household
DOI 10.1007/s11150-025-09783-4

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Abstract

The purpose of this paper is to conduct a theoretical and empirical analysis of how the behavior of parents and children is affected by the presence or absence of long-term care insurance (LTCI). In our empirical analysis, we use micro data from the Japan Household Panel Survey on Consumer Preferences and Satisfaction (JHPS-CPS), formerly known as the Preference Parameter Study, conducted by Osaka University. Japan is an interesting case to analyze because a public LTCI system was introduced there in 2000. Our analysis shows that, in the case of Japan, if parents are eligible for public LTCI benefits, their children will be less likely to be their primary caregiver and that this, in turn, will reduce their children’s perceived likelihood of receiving a bequest from them. This result implies that bequests are selfishly or strategically motivated (i.e., that parents leave bequests to their children in order to elicit care from them) and that the introduction of a public LTCI system will reduce the likelihood of children providing care to their parents and through this channel reduce their perceived likelihood of receiving a bequest from them.

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Cited by 2

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Metadata

Authors
Horioka, C. Y., Gahramanov, E., & Tang, X.
Venue
Review of Economics of the Household
Publisher
Springer Science and Business Media LLC
Published
2025-06-13
Volume
23
Issue
4
Pages
1155-1187
ISSN
  • 1569-5239
  • 1573-7152
DOI
10.1007/s11150-025-09783-4
Cited by
2
Language
en
Licence
Funders
Japan Society for the Promotion of Science (18H00870, 20H01513, 20H05633)

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Horioka, C. Y., Gahramanov, E., & Tang, X. (2025). On the impact of long-term care insurance on the behavior of parents and children: theory and evidence on Japan. Review of Economics of the Household. https://doi.org/10.1007/s11150-025-09783-4