SEMINAR SERIES
Applied Macroeconomics Seminar
Minchung Hsu（Associate Professor, GRIPS）
- Date&Time:
- 2019.11.8 (Fri) 16:30‐18:00
- Venue:
- Refresh Room on 8F, Faculty of Law and Faculty of Economics East Bldg., Yoshida Campus, Kyoto University
- Language:
- English
- Contact:
- Shinichi Nishiyama
Title:"Long Term Care and Household Savings of Couples and Singles"
Authors: Elena Capatina (ANU), Gary Hansen (UCLA), Minchung Hsu (GRIPS)
Abstract：
We build a life-cycle model of household consumption and saving decisions, where long term care (LTC) expenditures are endogenous. We use an LTC-state dependent utility function where regular consumption and LTC are valued differently. The model includes both married and single households, thus capturing family dynamics that are important for precautionary savings and LTC decisions. Married individuals face the risk of a spouse needing LTC and quickly depleting joint assets. However, those needing LTC can benefit from the presence of a healthy spouse who provides informal care, lowering the costs of LTC given a fixed quality of care. We use the calibrated model to estimate the importance of family dynamics for savings and consumption decisions, and also to quantify the impacts of LTC policy reforms such as the provision of a universal public system that pays for a minimum level of LTC costs.