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Optimal Redistribution With Productive Social Services

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Author Info
Luciano Greco () (University of Padua)

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Abstract

We analyze the optimality of alternative mechanisms of public provision of private goods affecting the productive capacity of households (e.g. education, health-care) rather than directly their welfare. Opting out mechanisms - often considered a tool to focus social expenditure - are proven to be welfare improving under the assumption that the provided good is not a substitute of households' exogenous productive capacity (say, inherited wealth). Conversely, when publicly provided goods are substitute of inherited productive capacity, topping up mechanisms prove more efficient.

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Publisher Info
Paper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0026.

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Length: 36 pages
Date of creation: Oct 2006
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Handle: RePEc:pad:wpaper:0026

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Related research
Keywords: In-kind transfers public provision of private goods opting out topping up

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Find related papers by JEL classification:
H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

This paper has been announced in the following NEP Reports:

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  1. Alessandro Balestrino, 2000. "Mixed Tax Systems and the Public Provision of Private Goods," International Tax and Public Finance, Springer, vol. 7(4), pages 463-478, August. [Downloadable!] (restricted)
  2. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February. [Downloadable!] (restricted)
  3. Keen, M. & Marchand, M., 1996. "Fiscal Competition and the Pattern of Public Spending," Papers 9601, Catholique de Louvain - Center for Operations Research and Economics.
    Other versions:
  4. Lindbeck, Assar, 2006. "The Welfare State -- Background, Achievements, Problems," Working Paper Series 662, Research Institute of Industrial Economics. [Downloadable!]
  5. Pirttila, Jukka & Tuomala, Matti, 2002. " Publicly Provided Private Goods and Redistribution: A General Equilibrium Analysis," Scandinavian Journal of Economics, Blackwell Publishing, vol. 104(1), pages 173-88. [Downloadable!] (restricted)
  6. Sören Blömquist & Vidar Christiansen, 1998. "Price Subsidies Versus Public Provision," International Tax and Public Finance, Springer, vol. 5(3), pages 283-306, July. [Downloadable!] (restricted)
  7. Blomquist, Soren & Christiansen, Vidar, 1999. "The political economy of publicly provided private goods," Journal of Public Economics, Elsevier, vol. 73(1), pages 31-54, July. [Downloadable!] (restricted)
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  8. Blomquist, Soren & Christiansen, Vidar, 1998. "Topping Up or Opting Out? The Optimal Design of Public Provision Schemes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 399-411, May.
    Other versions:
  9. Sören Blomquist & Vidar Christiansen, . "Price Subsidies versus Public Provision," EPRU Working Paper Series 97-08, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    Other versions:
  10. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September. [Downloadable!] (restricted)
  11. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September. [Downloadable!] (restricted)
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  12. James M. Poterba, 1995. "Government Intervention in the Markets for Education and Health Care: How and Why?," NBER Working Papers 4916, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Dreze, J.H., 2000. "Economic and Social Security in the Twenty-First Century, with Attention to Europe," Papers 2000/15, Catholique de Louvain - Center for Operations Research and Economics.
    Other versions:
  14. Cremer, Helmuth & Gahvari, Firouz, 1997. "In-kind transfers, self-selection and optimal tax policy," European Economic Review, Elsevier, vol. 41(1), pages 97-114, January. [Downloadable!] (restricted)
  15. Alistair Munro, 1990. "Self-Selection and Optimal In-Kind Transfers," Working Papers Series 90/3, University of Stirling, Department of Economics.
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  16. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-77, May. [Downloadable!] (restricted)
  17. Blomquist, Suren & Christiansen, Vidar, 1995. " Public Provision of Private Goods as a Redistributive Device in an Optimum Income Tax Model," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 547-67, December.
  18. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November. [Downloadable!] (restricted)
  19. Balestrino, Alessandro, 1999. " The Desirability of In-Kind Transfers in the Presence of Distortionary Taxes," Journal of Economic Surveys, Blackwell Publishing, vol. 13(4), pages 333-54, September. [Downloadable!] (restricted)
  20. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January. [Downloadable!] (restricted)
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  21. Guesnerie, Roger & Roberts, Kevin, 1984. "Effective Policy Tools and Quantity Controls," Econometrica, Econometric Society, vol. 52(1), pages 59-86, January. [Downloadable!] (restricted)
    Other versions:
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