Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution
- (pp. 491-502)
Abstract
This paper examines the role of cash transfers as a screening device when combined with in-kind transfers. It shows that linking in-kind to cash transfers makes first-best redistribution possible despite the government's inability to tell rich and poor individuals apart. Moreover, the maximal attainable welfare for the poor can be pushed beyond its first-best level by distorting downward the quality of the indivisible good the poor receive relative to the cash value of their net transfers. Using in-kind transfers alone, as in Besley and Coate (1991), leads to a third-best solution. (JEL D31, H23, H41)Citation
Gahvari, Firouz, and Enlinson Mattos. 2007. "Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution." American Economic Review, 97 (1): 491-502. DOI: 10.1257/aer.97.1.491Additional Materials
JEL Classification
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H41 Public Goods