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Quantitative evidence on the welfare effects of home sector fiscal policy

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  • Ragan, Kelly S.

Abstract

A home production model that explicitly accounts for taxes and public expenditures on day-care and elder-care, substitutes for work households perform at home, is used to evaluate the welfare implications of alternative public expenditure policies. Both subsidy and workfare policies are welfare improving relative to a model where tax revenues are rebated lump sum. The welfare gains from optimal home sector policy design can be large.

Suggested Citation

  • Ragan, Kelly S., 2013. "Quantitative evidence on the welfare effects of home sector fiscal policy," Economics Letters, Elsevier, vol. 118(2), pages 400-403.
    • Handle: RePEc:eee:ecolet:v:118:y:2013:i:2:p:400-403
    DOI: 10.1016/j.econlet.2012.11.030
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    References listed on IDEAS

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    1. Kelly S. Ragan, 2013. "Taxes and Time Use: Fiscal Policy in a Household Production Model," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 168-192, January.
    2. L. Rachel Ngai & Christopher A. Pissarides, 2011. "Taxes, Social Subsidies, and the Allocation of Work Time," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(4), pages 1-26, October.
    3. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    4. Sherwin Rosen, 1997. "Public Employment, Taxes, and the Welfare State in Sweden," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 79-108, National Bureau of Economic Research, Inc.
    5. Freeman, Richard B. & Topel, Robert H. & Swedenborg, Birgitta (ed.), 1997. "The Welfare State in Transition," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261782.
    6. Richard Rogerson, 2007. "Taxation and market work: is Scandinavia an outlier?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(1), pages 59-85, July.
    7. Sherwin Rosen, 1996. "Public Employment and the Welfare State in Sweden," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 729-740, June.
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    Cited by:

    1. Gómez, Manuel A., 2016. "Are taxes a good predictor of time use patterns? Examining the role of some key elasticities," Economic Modelling, Elsevier, vol. 55(C), pages 394-400.

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    More about this item

    Keywords

    Home production; Public expenditures; Subsidy; Workfare;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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