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Assessing the Effects of the Child-Care Fee Reform on Public Expenditures and Taxation

  • Hanes, Niklas

    ()

    (Department of Economics, Umeå University)

  • Holmlund, Linda

    ()

    (Department of Economics, Umeå University)

  • Wikström, Magnus

    ()

    (Department of Economics, Umeå University)

This paper studies the effects of the Swedish child-care fee reform on public expenditures and taxation in the municipalities. The reform implied a common system of child-care fees among all the municipalities and was introduced in 2002. In order to study its effects, we employ a difference-in-difference approach, where outcomes are compared with respect to differences in the municipalities’ pre-reform fee systems. It was found that pre-reform characteristics determine taxes and expenditures in the post-reform period. We then discuss the likely causes of these differences and find that the reform did change the child-care demand in municipalities that had applied time rates relative to those who applied income dependent fees prior to reform. Changes in child-care quality were not connected to the pre-reform fee systems characteristics.

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Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 780.

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Length: 26 pages
Date of creation: 02 Oct 2009
Date of revision:
Handle: RePEc:hhs:umnees:0780
Contact details of provider: Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
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