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Maximum fee versus child benefit: a welfare analysis of Swedish child-care fee reform

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  • Anna Brink

    ()

  • Katarina Nordblom

    ()

  • Roger Wahlberg

    ()

Abstract

The effects of a recent Swedish child-care fee reform are compared with those of an alternative reform, increased child benefits. The fee reform implied considerably decreased fees and was intended to increase both labor supply among parents and their economic well-being. We estimate labor supply effects using a discrete choice labor supply model, and simulate behavioral responses to the changes. We find positive, but small, effects on labor supply from reduced fees, while increased child benefits would make single mothers decrease their labor supply. On the other hand, increased child benefits would make income distribution more equal. We make a social welfare comparison and conclude that for plausible values of inequality aversion, the alternative reform would have been preferred to the implemented fee reform. Copyright Springer Science+Business Media, LLC 2007

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Bibliographic Info

Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 14 (2007)
Issue (Month): 4 (August)
Pages: 457-480

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Handle: RePEc:kap:itaxpf:v:14:y:2007:i:4:p:457-480

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Web page: http://www.springerlink.com/link.asp?id=102915

Related research

Keywords: Labor supply; Redistribution; Reform; Child care; Fees; Child benefit; H31; I38; J22;

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References

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Citations

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Cited by:
  1. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," Working Papers halshs-00805736, HAL.
  2. Bargain, Olivier & Orsini, Kristian & Peichl, Andreas, 2011. "Labor Supply Elasticities in Europe and the US," IZA Discussion Papers 5820, Institute for the Study of Labor (IZA).
  3. Olivier Bargain & Andreas Peichl, 2013. "Steady-State Labor Supply Elasticities: An International Comparison," Working Papers halshs-00805744, HAL.
  4. repec:ese:emodwp:em1-11 is not listed on IDEAS
  5. Shun-ichiro Bessho & Masayoshi Hayashi, 2012. "Should the Japanese Tax System Be More Progressive? An Evaluation Using Simulated SMCFs Based on the Discrete Choice Model of Labor Supply," CIRJE F-Series CIRJE-F-848, CIRJE, Faculty of Economics, University of Tokyo.
  6. Gathmann, Christina & Sass, Björn, 2012. "Taxing Childcare: Effects on Family Labor Supply and Children," IZA Discussion Papers 6440, Institute for the Study of Labor (IZA).
  7. Shun-ichiro Bessho & Masayoshi Hayashi, 2013. "ntensive Margins, Extensive Margins, and Spousal Allowances in the Japanes e System of Personal Income Taxes: A Discrete Choice Analysis," CIRJE F-Series CIRJE-F-912, CIRJE, Faculty of Economics, University of Tokyo.
  8. Wim Van Lancker & Joris Ghysels, 2011. "Who reaps the benefits? The social distribution of public childcare in Sweden and Flanders," Working Papers 1106, Herman Deleeck Centre for Social Policy, University of Antwerp.
  9. Nicholas-James Clavet & Jean-Yves Duclos, 2012. "Le financement des services de garde des enfants: effets sur le travail, le revenu des familles, et les finances publiques," Cahiers de recherche 1216, CIRPEE.
  10. Lancker, W. van & Ghysels, J., 2011. "GINI DP 10: Who Reaps the Benefits? The social distribution of public childcare in Sweden and Flanders," GINI Discussion Papers 10, AIAS, Amsterdam Institute for Advanced Labour Studies.
  11. Jakobsson, Niklas & Nordblom, Katarina, 2009. "Intergovernmental grants and fiscal competition," Working Papers in Economics 338, University of Gothenburg, Department of Economics.
  12. Bargain, Olivier & Peichl, Andreas, 2013. "Steady-State Labor Supply Elasticities: A Survey," IZA Discussion Papers 7698, Institute for the Study of Labor (IZA).

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