June 1, 2015

The stimulative effect of an unconditional block grant on the decentralized provision of care

Main image

We study the decentralization of home care in the Netherlands and exploit the gradual introduction of formula-based equalization to identify the effect of exogenous changes in an unconditional block grant on local expenditure and utilization. A one euro increase in central government grants raises local expenditure by fifty cents, while adjustments occur through the number of hours as well as through substitution between basic and more advanced types of assistance. These findings suggest that conditioning of grants is not required for the central government to retain some control over the decentralized provision of care.

Contacts

Foto Mark Kattenberg
Mark Kattenberg +31 6 11109028 Read more
Wouter Vermeulen Read more

Read more about