“New Eldercare System and Optimal Population Growth in an Aging European Society -OLG Framework-”

 Tatsuyoshi Miyakoshi, Hosei University

 Akira Shimada, Nagasaki University

This paper answers four research questions on eldercare in aging society by OLG model. (i)Does the utility of the individual decrease under the eldercare system with its fixed working and eldercare hours? "Yes". (ii)How does the young decide the optimal number of eldercare hours? The young finds the optimal number of eldercare hours different from the previous fixed number. The policymakers must introduce a 'family care leave' to satisfy the short of the optimal eldercare hours. (iii)Can the individual adjust easily to the optimal number of eldercare hours? "No", because the preference elasticity for the optimal number of eldercare hours is larger. The policy makers must provide "long-term care insurance" that supplements the smaller number of eldercare hours. (iv)What is the optimal population growth rate? The optimal growth rate is the lower to zero as society needs the more eldercare and the more pessimistic opinion, rationalizing the aging society.