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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.

Suggested Citation

  • Hanes, Niklas & Holmlund, Linda & Wikström, Magnus, 2009. "Assessing the Effects of the Child-Care Fee Reform on Public Expenditures and Taxation," Umeå Economic Studies 780, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0780

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    References listed on IDEAS

    1. Hamilton, Kirk & Clemens, Michael, 1999. "Genuine Savings Rates in Developing Countries," World Bank Economic Review, World Bank Group, vol. 13(2), pages 333-356, May.
    2. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 90(1), pages 156-162.
    3. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-380, December.
    4. Asheim, Geir B, 1994. " Net National Product as an Indicator of Sustainability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 257-265.
    5. Hamilton, Kirk, 1994. "Green adjustments to GDP," Resources Policy, Elsevier, vol. 20(3), pages 155-168, September.
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    Cited by:

    1. Siflinger, Bettina & van den Berg, Gerard, 2016. "The Effects of a Universal Child Care Reform on Child Health – Evidence from Sweden," Annual Conference 2016 (Augsburg): Demographic Change 145765, Verein für Socialpolitik / German Economic Association.

    More about this item


    child-care subsidies; local public expenditures; income taxation;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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