Identifying Discretion of Municipalities to Undertake Eligibility Assessments for Japan’s Long-Term Care Insurance Program

Nakazawa, Kasuyoshi (2016): Identifying Discretion of Municipalities to Undertake Eligibility Assessments for Japan’s Long-Term Care Insurance Program.

Abstract

Eligibility assessments play an important role in Japan’s long-term care insurance program and have been designed so that municipalities do not have discretion in their working. However, there are doubts about eligibility assessments based on the municipal fiscal situation. This study empirically identifies the discretion of municipalities to undertake eligibility assessments employing the idea of opportunistic municipal behavior at amalgamation. Amalgamation offers municipalities an incentive to free ride (e.g., public debt accumulation) when they can subrogate the load to a new municipality after amalgamation. If so, pre-merger municipalities might increase the eligibility ratio before amalgamation. Difference-in-difference regression confirms a free-rider effect of pre-merger municipalities in the eligibility assessments for long-term care by Japanese municipalities. Smaller pre-merger municipalities increase the eligibility ratio immediately before amalgamation. These results mean that the Japanese long-term care insurance system is not managed in accordance with the institutional design.

• Item Type: MPRA Paper
• Language: English
• Keywords: Long-term care insurance; Eligibility assessment; Municipal amalgamation; Free-rider behavior; Difference-in-difference
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H73 - Interjurisdictional Differentials and Their Effects; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H75 - State and Local Government: Health ; Education ; Welfare ; Public Pensions; I - Health, Education, and Welfare > I1 - Health > I13 - Health Insurance, Public and Private; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R51 - Finance in Urban and Rural Economies

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