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- Title
Where Should the Elderly Live and Who Should Pay for Their Care?
- Authors
Aronsson, Thomas; Blomquist, Sören; Micheletto, Luca
- Abstract
We consider a model with a population consisting of earners and retired persons; elderly care is publicly provided. There is one big city, where congestion effects and agglomeration forces are at work, and a number of small villages. We show how the externalities related to population mobility lead to an inefficient spatial distribution of earners and retirees, and we characterize the second-best solution. Decentralization of this solution in a fiscal federalism structure requires the use of taxes and subsidies proportional to the number of earners and retired persons living in the city and the villages.
- Subjects
ELDER care; RETIREES; ECONOMIC models; AGGLOMERATION (Materials); FEDERAL government; CITIES &; towns; VILLAGES; EXTERNALITIES
- Publication
Scandinavian Journal of Economics, 2010, Vol 112, Issue 2, p289
- ISSN
0347-0520
- Publication type
Article
- DOI
10.1111/j.1467-9442.2010.01601.x