The Effects of Central Grants on Decentralized Social Programs: Post ]2005 School Expense Assistance in Japan
This study examines the effects of central matching grants for the School Expense Assistance (SEA) in the midst of increasing child poverty in Japan. The 2005 reform replaced SEA grants with increases in general revenues through the system of Local Allocation Tax (LAT). By exploiting the facts that the replaced grants were closed ]ended and that LAT disbursements were not made to every locality, we could not only identify the effects of the matching grants but also decompose the effects into price and income effects. We show that the 2005 change indeed suppressed SEA expenditures. The loss of matching grants reduced per ]recipient SEA benefits by about JPN\5,000 (US$56) for first ]year elementary school students and JPN\12,000 (US$133) for first ]year junior high school students. The loss also reduced recipient percentage among students by 1.2-2.1 percentage points from 11.52 percent in 2004, although the eligibility criteria were barely affected.
|Date of creation:||Mar 2010|
|Contact details of provider:|| Postal: 2-1 Naka, Kunitachi City, Tokyo 186|
Web page: http://www.ier.hit-u.ac.jp/
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- Baker, Michael & Payne, A. Abigail & Smart, Michael, 1999.
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- Matz Dahlberg & Eva Mörk & Jørn Rattsø & Hanna Ågren, 2006. "Using a discontinuous grant rule to identify the effect of grants on local taxes and spending," Working Papers 2006-12, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Poterba, James M, 1998. "Demographic Change, Intergenerational Linkages, and Public Education," American Economic Review, American Economic Association, vol. 88(2), pages 315-320, May.
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