Fair long-term care insurance

The study of optimal long-term care (LTC) social insurance is generally carried out under the utilitarian criterion, which penalizes individuals who have a lower capacity to convert resources into well-being, such as dependent elderly or prematurely dead individuals. This paper revisits design LTC while adopting two egalitarian criteria—ex ante and ex post egalitarianism—which give priority worst-off either in expected realized terms. Using lifecycle model with risk about duration life old-age dependence, it shown that second-best criterion involves, comparison utilitarianism, higher pension benefits tax rates on savings labor earnings. In egalitarianism, egalitarianism involves benefits, rate earnings, order increase consumption young, include persons will turn be short-lived.