Discussion Papers 2017

CIRJE-F-1064	"Do Central Grants Affect Welfare Caseloads? Evidence from Public Assistance in Japan"
Author Name	Hayashi, Masayoshi
Date	September 2017
Full Paper	PDF file
Remarks	Revised in September 2018; subsequently published as Hayashi, M., 2019. Do central-government grants affect welfare caseloads? Evidence from Public Assistance in Japan. FinanzArchiv: Public Finance Analysis 75(2), 152-186. DOI: 10.1628/fa-2019-0001

Abstract
This study examines the existence of a "loosening effect" on a local social policy of central funding by exploiting a specific mechanism in the Japanese system of central grants and two institutional changes in categorical grants for local social assistance programs. Despite performing various types of estimations, we fail to substantiate the existence of the loosening effect. This result indicates the dominance of central control over local discretion in public assistance programs, and suggests that important factors are administrative rather than fiscal.
Keywords: welfare caseloads, social assistance, fiscal transfers, Japan

Abstract

This study examines the existence of a "loosening effect" on a local social policy of central funding by exploiting a specific mechanism in the Japanese system of central grants and two institutional changes in categorical grants for local social assistance programs. Despite performing various types of estimations, we fail to substantiate the existence of the loosening effect. This result indicates the dominance of central control over local discretion in public assistance programs, and suggests that important factors are administrative rather than fiscal.

Keywords: welfare caseloads, social assistance, fiscal transfers, Japan