Sören Blomquist and Vidar Christiansen 2004
This paper highlights the role of tax funding of day care for children and demonstrates that the optimal income tax should face all agents with the cost of the needed day care in order to earn further income; hence day care should not be subsidized but paid for via the tax bill. Furthermore, heterogeneity of preferences for work and day care does not invalidate the Pareto improving properties of this kind of public provision.
