The Effects of Central Grants on Decentralized Social Programs: Post]2005 School Expense Assistance in Japan
AbstractThis study examines the effects of central matching grants for the School Expense Assistance (SEA) in the midst of increasing child poverty in Japan. The 2005 reform replaced SEA grants with increases in general revenues through the system of Local Allocation Tax (LAT). By exploiting the facts that the replaced grants were closed]ended and that LAT disbursements were not made to every locality, we could not only identify the effects of the matching grants but also decompose the effects into price and income effects. We show that the 2005 change indeed suppressed SEA expenditures. The loss of matching grants reduced per]recipient SEA benefits by about JPN\5,000 (US$56) for first]year elementary school students and JPN\12,000 (US$133) for first]year junior high school students. The loss also reduced recipient percentage among students by 1.2-2.1 percentage points from 11.52 percent in 2004, although the eligibility criteria were barely affected.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-118.
Date of creation: Mar 2010
Date of revision:
school expense assistance; fiscal transfers; differnce-in-difference; Japan;
Find related papers by JEL classification:
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-13 (All new papers)
- NEP-LAB-2010-03-13 (Labour Economics)
- NEP-PBE-2010-03-13 (Public Economics)
- NEP-URE-2010-03-13 (Urban & Real Estate Economics)
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