Redistribution at the Local Level: The Case of Public Childcare in Italy. University of Verona Department of Economics Working Paper 21/2013 (ISSN 2036-2919)

We study the determinants of redistribution at the municipal level in the context of public childcare in Italy. Within a substantially homogeneous legislative framework, different municipalities autonomously define how participation fees vary with a compound indicator of income and wealth (ISEE), thus redistributing resources across households using the service. The nearly one hundred municipalities we take into account exhibit wide heterogeneity in redistributive attitudes. We find statistically significant correlations of these with a number of in dividual characteristics of policy-makers and municipalities, but not with those of the ex-ante distribution of income, which should be central according to both normative and positive theory. Since the price of public childcare is subsidized, resources are also redistributed from tax-payers to users. The evidence that we find is consistent with the hypothesis that this type of redistribution is a public good.