Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution
This paper examines the role of cash transfers as a screening device when combined with in-kind transfers. It shows that linking in-kind to cash transfers makes first-best redistribution possible despite the government's inability to tell rich and poor individuals apart. Moreover, the maximal attainable welfare for the poor can be pushed beyond its first-best level by distorting downward the quality of the indivisible good the poor receive relative to the cash value of their net transfers. Using in-kind transfers alone, as in Besley and Coate (1991), leads to a third-best solution. (JEL D31, H23, H41)
Volume (Year): 97 (2007)
Issue (Month): 1 (March)
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- 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.
- Besley, T. & Coate, S., 1989. "Public Provision Of Private Goods And The Redistribution Of Income," Papers 36, Princeton, Woodrow Wilson School - Discussion Paper.
- Bourguignon, Francois & Ferreira, Francisco H. G. & Leite, Phillippe G., 2002.
"Ex-ante evaluation of conditional cash transfer programs: the case of bolsa escola,"
Policy Research Working Paper Series
2916, The World Bank.
- François Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2002. "Ex-ante Evaluation of Conditional Cash Transfer Programs: The Case of Bolsa Escola," William Davidson Institute Working Papers Series 516, William Davidson Institute at the University of Michigan.
- Gahvari, Firouz, 1994. "In-kind transfers, cash grants and labor supply," Journal of Public Economics, Elsevier, vol. 55(3), pages 495-504, November.
- Gahvari, Firouz, 1995. "In-Kind versus Cash Transfers in the Presence of Distortionary Taxes," Economic Inquiry, Western Economic Association International, vol. 33(1), pages 45-53, January.
- 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.
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