The Efficiency Case of Universality
The paper analyzes the replacement of universal social programs with targeted social benefits. We define "universality" as separability of tax/transfer system in income and other non-monetary attributes, and introduce the concept of "parallel equity" - a requirement that like differences in needs should be treated alike. We develop a model which shows that under specificed assumptions universality is efficient as well as equitable; "clawback" results in an inefficient structure of net marginal tax rate.
|Date of creation:||Aug 1996|
|Date of revision:||May 1999|
|Publication status:||Published: – revised version in Canadian Journal of Economics, Vol. 32, No. 3 (May 1999), pp. 613–629|
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