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The Economics of Vouchers

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  • David F. Bradford
  • Daniel N. Shaviro

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.

Suggested Citation

  • David F. Bradford & Daniel N. Shaviro, 1999. "The Economics of Vouchers," NBER Working Papers 7092, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7092
    Note: PE
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    File URL: http://www.nber.org/papers/w7092.pdf
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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2006. "Urban Land and Housing Markets in the Punjab, Pakistan," World Bank Publications - Reports 8280, The World Bank Group.
    2. BOUSSELIN Audrey, 2019. "Expanding access to universal childcare: Effects on childcare arrangements and maternal employment," LISER Working Paper Series 2019-11, Luxembourg Institute of Socio-Economic Research (LISER).
    3. David E. Dowall & Peter D. Ellis, 2009. "Urban Land and Housing Markets in the Punjab, Pakistan," Urban Studies, Urban Studies Journal Limited, vol. 46(11), pages 2277-2300, October.
    4. Andreas Freytag, 2002. "Estonian labour market and EMU membership - challenges and policy options," Bank of Estonia Working Papers 2002-11, Bank of Estonia, revised 10 Dec 2002.
    5. Steven Anlian & Raymond J., 2003. "Home Purchase Certificates: The Other Housing Vouchers," European Journal of Housing Policy, Taylor and Francis Journals, vol. 3(3), pages 227-241.

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    JEL classification:

    • H00 - Public Economics - - General - - - General
    • H80 - Public Economics - - Miscellaneous Issues - - - General

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