The Economics of Vouchers
AbstractThis paper aims to provide a swift tour of the economic issues presented by vouchers and thus to fill an apparent gap in the literature for a basic survey of the subject. Among the issues it considers are: factors determining a voucher's cash-equivalence; reasons (such as paternalism, externalities, and distribution) for giving beneficiaries non-cash-equivalent vouchers rather than cash; optimal tax issues involved in the design of vouchers and the choice between vouchers and other delivery mechanisms, including factors determining the optimal marginal reimbursement rate (MRR) in a voucher program, and the similarity between this question and that of determining optimal marginal tax rates (MTRs) under the income tax; the incentive effects of voucher eligibility criteria, such as income or asset tests; factors determining the allocative and price effects of vouchers, both in the short run when unexpectedly enacted and at equilibrium; and factors relevant to the choice between private and public supply that may often overlap with the decision whether to adopt a voucher program.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7092.
Date of creation: Apr 1999
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Find related papers by JEL classification:
- H00 - Public Economics - - General - - - General
- H80 - Public Economics - - Miscellaneous Issues - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-05-03 (All new papers)
- NEP-EDU-1999-05-03 (Education)
- NEP-IND-1999-05-03 (Industrial Organization)
- NEP-PBE-1999-05-03 (Public Economics)
- NEP-PUB-1999-05-03 (Public Finance)
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