Arbeitspapier

The distributional impact of public services when needs differ

Despite a broad consensus on the need to take into account the value of public services in distributional analysis, there is little reliable evidence on how the inclusion of such non-cash income actually affects poverty and inequality estimates. In particular, the equivalence scales applied to cash income are not necessarily appropriate when including non-cash income, because the receipt of public services is likely to be associated with particular needs. In this paper, we propose a theory-based framework designed to provide a coherent evaluation of the distributional impact of local public services. The valuation of public services, identification of target groups, allocation of expenditures to target groups, and adjustment for differences in needs are derived from a model of local government spending behaviour. Using Norwegian data from municipal accounts and administrative registers we find that the inclusion of non-cash income reduces income inequality by about 15 percent and poverty rates by almost one-third. However, adjusting for differences in needs for public services across population subgroups offsets about half the inequality reduction and some of the poverty decrease.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 4826

Klassifikation
Wirtschaft
Personal Income, Wealth, and Their Distributions
State and Local Budget and Expenditures
Welfare, Well-Being, and Poverty: General
Thema
Income distribution
poverty
public services
non-cash income
needs adjustment
equivalence scales
Einkommensverteilung
Disparitätsmaß
Kommunale Dienstleistung
Verteilungswirkung
Armut
Bedarfsprinzip
Norwegen

Ereignis
Geistige Schöpfung
(wer)
Aaberge, Rolf
Bhuller, Manudeep
Langørgen, Audun
Mogstad, Magne
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2010

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Aaberge, Rolf
  • Bhuller, Manudeep
  • Langørgen, Audun
  • Mogstad, Magne
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2010

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