Measuring the Benefits from Public Services: The Effects of Local Government Spending on the Distribution of Income in Norway

23 Pages Posted: 8 May 2006

See all articles by Rolf Aaberge

Rolf Aaberge

Statistics Norway; Institute for the Study of Labor (IZA); Deaprtment of Economics

Audun Langørgen

Statistics Norway

Abstract

The purpose of this paper is to provide an evaluation of how local public in-kind benefits affect the distribution of income in Norway. To this end, a method that accounts for differences between municipalities in capacity to produce the same standard of public services is used for assessing the value of sector-specific local public services in each municipality. Moreover, recipient frequencies in various demographic groups are used as basis for determining the allocation of the assessed value of services on citizens of the municipalities. The empirical results show that inequality in the (marginal) distribution of municipal in-kind benefits is rather high. The contribution of municipal in-kind benefits to inequality in the distribution of extended income (cash (after-tax) income plus municipal in-kind benefits) proves, however, to be approximately neutral.

Suggested Citation

Aaberge, Rolf and Langørgen, Audun, Measuring the Benefits from Public Services: The Effects of Local Government Spending on the Distribution of Income in Norway. Review of Income and Wealth, Vol. 52, No. 1, pp. 61-83, March 2006, Available at SSRN: https://ssrn.com/abstract=886828 or http://dx.doi.org/10.1111/j.1475-4991.2006.00176.x

Rolf Aaberge (Contact Author)

Statistics Norway ( email )

N-0033 Oslo
Norway

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Deaprtment of Economics ( email )

Norway

Audun Langørgen

Statistics Norway ( email )

N-0033 Oslo
Norway

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