elderly parents. But State intervention can also modify the transmission of values and reduce the long-run prevalence of family altruism in the population. That evolutionary e§ect questions the desirability of the LTC public provision. To characterize the optimal LTC policy, we develop a three-period OLG model where the population is divided into altruistic and non-altruistic agents, and where the transmission of (non) altruism takes place through a socialization process ‡ la Bisin and Verdier (2001).
The optimal short-run and long-run LTC policies are shown to di§er, to an extent varying with the particular socialization mechanism at work.