CIRJE-F-1064 "Do Central Grants Affect Welfare Caseloads?
Evidence from Public Assistance in Japan"
Author Name

Hayashi, Masayoshi

Date September 2017
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This study examines the "loosening effect" on a local social policy of central funding. For this, we exploit a specific mechanism of the Japanese system of central grants and two institutional changes in the categorical grants for local social assistance programs. Despite performing various difference-in-differences estimations, we find no statistically significant effects. This failure to substantiate the loosening effect may point to the dominance of central control over local discretion in public assistance programs and suggests that administrative factors rather than fiscal ones are the most important.