The Economics of Vouchers

David Bradford and Daniel N. Shaviro

No 7092, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper aims to provide a swift tour of the economic issues presented by vouchers and thus to fill an apparent gap in the literature for a basic survey of the subject. Among the issues it considers are: factors determining a voucher's cash-equivalence; reasons (such as paternalism, externalities, and distribution) for giving beneficiaries non-cash-equivalent vouchers rather than cash; optimal tax issues involved in the design of vouchers and the choice between vouchers and other delivery mechanisms, including factors determining the optimal marginal reimbursement rate (MRR) in a voucher program, and the similarity between this question and that of determining optimal marginal tax rates (MTRs) under the income tax; the incentive effects of voucher eligibility criteria, such as income or asset tests; factors determining the allocative and price effects of vouchers, both in the short run when unexpectedly enacted and at equilibrium; and factors relevant to the choice between private and public supply that may often overlap with the decision whether to adopt a voucher program.

JEL-codes: H00 H80 (search for similar items in EconPapers)
Date: 1999-04
New Economics Papers: this item is included in nep-edu, nep-ind, nep-pbe and nep-pub
Note: PE
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Citations: View citations in EconPapers (5)

Published as Steuerle, C. Eugene, et al. (eds.) Vouchers and the provision of public services. Washington, D.C.: Brookings Institution Press; Washington, D.C.: Committee for Economic Development, 2000.

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