The effects of grants-in-aid on state and local expenditures

作者: Robert A. Moffitt

DOI: 10.1016/0047-2727(84)90032-X

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摘要: Abstract This paper develops econometric methods to estimate the effect of piecewise-linear budget constraints created by grant formulas in which subsidy rate is not constant over expenditures (e.g. closed-end grants). The are applied AFDC program. results show that, because kinked nature formula, (1) present federal formula actually increases cross-state inequality benefits, (2) several rates reduce and (3) so-called ‘flypaper’ disappears.

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