This paper examines the response of Swedish local governments to a targeted intergovernmental stimulus grant aimed at increasing staffing levels in elderly care. The focus is on two key outcomes: municipal elderly care personnel costs relative to total municipal costs and the number of full-time employees in elderly care per elderly user. An OLS regression based on panel data between 2011 and 2018 initially estimates the grant’s spending effects. An instrumental variable (IV) model is then employed to address potential endogeneity, utilizing an update in the grant allocation formula. Both the OLS and IV estimates suggest that the stimulus grant has no discernible effect on the ratio of elderly care personnel costs to total municipal spending. Furthermore, the IV results show insignificant short-run effects on full-time employment in elderly care. However, significant increases are observed three years after the allocation formula update. The overall effects confirm standard economic grant theory predicting how non-matching targeted grants only contribute to an income effect.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-533813 |
| Date | January 2024 |
| Creators | Panas, Ella |
| Publisher | Uppsala universitet, Nationalekonomiska institutionen |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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