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Quantitative evidence on the welfare effects of home sector fiscal policy

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  • Ragan, Kelly S.

Abstract

A home production model that explicitly accounts for taxes and public expenditures on day-care and elder-care, substitutes for work households perform at home, is used to evaluate the welfare implications of alternative public expenditure policies. Both subsidy and workfare policies are welfare improving relative to a model where tax revenues are rebated lump sum. The welfare gains from optimal home sector policy design can be large.

Suggested Citation

  • Ragan, Kelly S., 2013. "Quantitative evidence on the welfare effects of home sector fiscal policy," Economics Letters, Elsevier, vol. 118(2), pages 400-403.
    • Handle: RePEc:eee:ecolet:v:118:y:2013:i:2:p:400-403
    DOI: 10.1016/j.econlet.2012.11.030
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    References listed on IDEAS

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    1. Kelly S. Ragan, 2013. "Taxes and Time Use: Fiscal Policy in a Household Production Model," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 168-192, January.
    2. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    3. Sherwin Rosen, 1997. "Public Employment, Taxes, and the Welfare State in Sweden," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 79-108, National Bureau of Economic Research, Inc.
    4. L. Rachel Ngai & Christopher A. Pissarides, 2011. "Taxes, Social Subsidies, and the Allocation of Work Time," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(4), pages 1-26, October.
    5. Freeman, Richard B. & Topel, Robert H. & Swedenborg, Birgitta (ed.), 1997. "The Welfare State in Transition," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261782, November.
    6. Richard Rogerson, 2007. "Taxation and market work: is Scandinavia an outlier?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(1), pages 59-85, July.
    7. Sherwin Rosen, 1996. "Public Employment and the Welfare State in Sweden," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 729-740, June.
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    Cited by:

    1. Gómez, Manuel A., 2016. "Are taxes a good predictor of time use patterns? Examining the role of some key elasticities," Economic Modelling, Elsevier, vol. 55(C), pages 394-400.

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    More about this item

    Keywords

    Home production; Public expenditures; Subsidy; Workfare;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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