This paper sets up a dynamic general equilibrium model with endogenous fertility and examines the effects of publicly-provided elderly care on an individual's utility and the sustainability of the public elderly care program. The amount of savings is larger without the public elderly care program than with it because it reduces precautionary savings. Therefore, thanks to precautionary savings, the per capita income is also higher without the public elderly care than that with it in the steady state. As a result, the public elderly care program decreases individual's utility. Also, it is shown that the public elderly care program is not sustainable when fertility is low.
