Maximum fee vs child benefit: A welfare analysis of Swedish child-care fee reform

Anna Brink (), Katarina Nordblom () and Roger Wahlberg ()
Additional contact information
Anna Brink: Division for Tax Policy Analysis, Postal: Ministry of Finance, SE-103 33 Stockholm, Sweden
Roger Wahlberg: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG

No 250, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: The effects of a recent Swedish child-care fee reform are compared with those of an alternative reform, increased child benefits. The fee reform implied considerably decreased fees and was intended to increase both labor supply among parents and their economic well-being. We estimate labor supply effects using a discrete choice labor supply model, and simulate behavioral responses to the changes. We find positive, but small, effects on labor supply from reduced fees, while increased child benefits would make single mothers decrease their labor supply. On the other hand, increased child benefits would make income distribution more equal. We make a social welfare comparison and conclude that for plausible values of inequality aversion, the alternative reform would have been preferable to the implemented fee reform.

Keywords: Labor supply; Redistribution; Reform; Child care; Fees; Child benefit (search for similar items in EconPapers)
JEL-codes: H31 I38 J22 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2007-04-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Published in International Tax and Public Finance, 2007, pages 457-480.

Downloads: (external link)
http://hdl.handle.net/2077/3273 (text/html)

Related works:
Working Paper: Maximum Fee vs. Child Benefit: A Welfare Analysis of Swedish Child-Care Fee Reform (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunwpe:0250

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers in Economics from University of Gothenburg, Department of Economics Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Jessica Oscarsson ().