2021 Fiscal Year Research-status Report
Optimal in-kind benefits in means-tested programs
| Project/Area Number |
20K01676
|
|---|
| Research Institution | National Graduate Institute for Policy Studies |
|---|
Principal Investigator |
Porapakkarm P. 政策研究大学院大学, 政策研究科, 准教授 (10751266)
|
|---|
| Project Period (FY) |
2020-04-01 – 2023-03-31
|
| Keywords | in-kind transfer / home production / optimal taxation |
|---|
| Outline of Annual Research Achievements |
Arguably, in-kind transfers can be targeted to only intended beneficiaries. This argument is, however, weakened since means-testing restriction already serves as a way to target beneficiaries. Our question is whether there is a room for in-kind provision in means-tested programs.
In our framework there are two types of agents: low and high labor productivity types. An agent derives utility from leisure, consumption goods, and home-produced goods which needs both time and marketable inputs. For a welfare perspective, it is desirable to redistribute from high to low productivity types. Due to asymmetric information, high productivity types can, however, falsely claim to be low productivity ones by working less. Our earlier results show that to prevent this strategy the optimal allocation of an agent who claims to have low productivity must involve two distortions (relative to the case without asymmetric information). First, their leisure must be distorted upward (having too much leisure). Second, their consumption and marketable inputs must be distorted to prevent a falsely claiming high-productive type from gaining by reallocating leisure to home production activities.
Currently, we explore several implementations of this allocation. For a case where time and marketable inputs are perfectly complementary, we show analytically that this allocation cannot be implemented through a linear commodity taxation or a linear pricing scheme. Combining an income-testing and a non-linear pricing schedule can implement the allocation. However, it does not involve an in-kind transfer.
|
| Current Status of Research Progress |
Current Status of Research Progress
4: Progress in research has been delayed.
Reason
So far, due to the on-going travel restriction in 2021, we have made less progress than our original plan. Specifically, we cancel and shorten our research meeting during 2021.
We expect to resume the normal collaboration in the later half of 2022.
|
| Strategy for Future Research Activity |
For the next step, we try to extend our current findings to an optimal in-kind transfer scheme. Specifically, we plan to introduce an additional home-produced goods in our current setup and explore the possible implementation that involves in-kind transfer. We speculate that introducing an additional home-produced goods can lead to this result. Intuitively, an additional home-produced goods lowers the cost of a false claim. Thus, a more elaborate (and possibly more complex) implementation scheme is needed.
We plan to use our results to discuss the characteristics of home-input goods that should be provided in-kind. This results are relevant for several in-kind transfer programs, such as Supplementary Nutritional Assistance Program (SNAP) in the US.
|
| Causes of Carryover |
Due to the travel restriction which has been extended from 2020 till 2022, the unused balance will be used to support my research meeting and conference attendance during the fiscal year 2022.
|
