The role of Japan’s public long-term care system, which lightens the monetary burden of people in need of care, is more important than ever, given the country’s aging society and trend toward nuclear families. Using an overlapping generation model with endogenous fertility, this study examines how such financial relief for users of the public long-term care system affects population growth, physical capital, quality of family care, price and quality of services supplied by care service providers, and social welfare.