The Low Demand for Long-Term Care Insurance: Housing, Bequests or Both?

Bertrand Achou, PSE, Ecole d'économie de Paris

Bertrand Achou

Abstract :
This paper constructs a life-cycle model of retired single women in which home equity may substitute for long-term care insurance (LTCI). Using the Health and Retirement Study and a method of simulated moments, I estimate different versions of the model to assess the potential strenght of this substitution effect. Results so far seem to indicate that housing may have a strong impact on the low demand for LTCI.