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Political economy of redistribution between traditional and modern families

Author

Listed:
  • Volker Meier

    (Ifo Institute for Economic Research)

  • Matthew D. Rablen

    (Department of Economics, University of Sheffield)

Abstract

We analyse a model in which families may either be ‘traditional’ single-earner that care for the child at home or be ‘ modern’ double-earner households that use market child care. Family policies may favour one or the other group, like market care subsidies vs. cash-for-care. Policies are determined by probabilistic voting, where distributional impacts matter, both within and across groups. A higher share of modern households—which can be induced by changes in social norms or by changes in gender wage inequality—may have non-monotone effects, with lower net subsidies to traditional households when their share is very low or very high, and higher subsidies in some intermediate stage. This may explain the implementation of cash-for-care policies and their subsequent tightening in late stages of development, when most voters come from modern households, observed in Norway and Sweden.

Suggested Citation

  • Volker Meier & Matthew D. Rablen, 2024. "Political economy of redistribution between traditional and modern families," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(4), pages 980-1008, August.
  • Handle: RePEc:kap:itaxpf:v:31:y:2024:i:4:d:10.1007_s10797-023-09786-w
    DOI: 10.1007/s10797-023-09786-w
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    More about this item

    Keywords

    Redistribution; Child care; Cash-for-care; Subsidies; Family policy; Probabilistic voting;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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