Abstract

This paper analyzes the possible effects of the hypothetical introduction in Italy of a voucher program similar to the French CESU (Cheque Emploi Service Universel). After shortly discussing the rationale for public policies aimed at providing support to worklife balance, we introduce the possible role of vouchers in financing demand for such services. We remark that the CESU (together with similar programs currently run in the UK and in Belgium) set a new paradigm for social policy: the public financing takes the form of tax allowances and public funds are available under the condition that private money is spent on specific merit goods/services. We use a micro-simulation model in order to assess the impact of this program on family and firm budgets and on public finances in Italy. We find that these effects are substantial and that in the Italian tax system the issue of tax allowance exhaustion is crucial.