PurposeAn increase in life expectancy brings about an aging society, necessitating increasing demand for elderly care services. The purpose of this paper is to present an examination of: how an aging society affects the demand for elderly care services and the labor market for elderly care services; how the labor share and wage inequality between the final goods sector and elderly care sector are determined; and whether the subsidy for elderly care service increases demand for elderly care services or not.Design/methodology/approachThis paper sets the dynamics general equilibrium model with two sectors model: one for final goods sector and the other for elderly care services. This paper derives how the labor supply for elderly care services is determined in the theoretical model. In addition to analytical research works, this paper examines how the subsidy for elderly care service affects the labor share allocated for elderly care sector and wage inequality between the final goods sector and the elderly care sector with the numerical examples.FindingsRelated reports of the literature describe that an aging society raises the share of labor dedicated to elderly care services. However, considering a closed economy in which saving affects the capital stock, an aging society does not always raise the share of labor used for elderly care services because the wage rate of the final goods sector increases with an aging society. This effect prevents the increase of the labor supplied to elderly care services. On the other hand, the subsidy for the elderly care service raises the labor share of elderly care sector.Research limitations/implicationsThe related literatures derive that an aging society raises the labor share allocated for elderly care sector. However, the paper shows that the subsidy for elderly care plays an important role in the increase in the labor share of elderly care sector.Practical implicationsThis paper examines how the aging society affects the labor share of elderly care sector, wage inequality between final goods sector and elderly care sector and others with numerical examples. Thanks to the numerical examples, this paper derives the quantitative result and shows how the subsidy for elderly care service should be provided.Originality/valueThe author thinks that this paper has rich implications and originality. There exists no literature that examines how the labor share of elderly care sector and the relative wage rate of elderly care sector are determined by the aging and the subsidy for elderly care service. The author thinks that it is a very important analysis because many economically developed countries face the aging society problem.
Journal of Economic Studies – Emerald Publishing
Published: Jan 7, 2019
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera