Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private LTC insurance (Brown and Finkelstein, 2008), private saving (Gruber and Yelowitz, 1999; Sloan and Norton, 1997), or informal care (Pauly, 1990; Zweifel and Strüwe, 1997). This contribution predicts crowding-out effects for both private LTC insurance and informal care on the one hand and private saving and informal care on the other. These effects result from the interaction of a parent who decides about private LTC insurance before retirement and the amount of saving in retirement and a caregiver who decides about effort devoted to informal care. Some of the predictions are tested using a recent survey from China.

Peter Zweifel is an Emeritus of the University of Zurich. After a postdoc position with  the University of Wisconsin-Madison in 1974-75, he received tenure with the University of Zurich in 1984. Publications include more than 100 articles in refereed journals (AER, EnJ, EurJHE, JHE, JRI, JRU, PubCh) as well as Health Economics (with F. Breyer und M. Kifmann) and Insurance Economics (with R. Eisen); Energy Economics (with G. Erdmann and A. Praktiknjo) will be available by the end of 2015.