Publication Type

Working Paper

Publication Date

1-2017

Abstract

This study investigates whether the possibility of engaging in householdchildcaremayexacerbatetheincentivesofparentsandgrandparentsto falsely claim disability benefits. I present an efficient implementation case for subsidizing formal child care costs of the disabled and propose an implementation of the optimal scheme that consists of capped formal day care subsidies, non-linear income taxation and asset-testing. I calibrate a multigenerational family model with persistence in privately observed shocks to matchkeyfeaturesoftheUSlaborandchildcaremarkets,andfindthatday care subsidies may lead to sizeable cost savings.

Keywords

Social insurance, day care subsidies, multi-member family

Discipline

Income Distribution | Insurance

Research Areas

Applied Microeconomics

First Page

1

Last Page

49

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

https://sites.google.com/site/christineho5/research-1

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