The National Care System in Uruguay: Who Benefits and Who Pays?

Abstract

We analyze two specific policies that make up the National Care System, a social policy being implemented in Uruguay. Through the calibration of a static tax benefit model, we estimate the distributive impact of the expansion of child care services and home-based care for the dependent elderly, both financed through a progressive direct tax on income. Even if redistribution is not always the rationale of the public services, this discussion about redistributive impaas is important to understand, among other things, the political economy behind these policies. We highlight the importance of identifying who benefits from these services and show that in the Uruguayan case, the redistributive impact is very limited. Even if benefits are significant for individual households, the overall impact is weak, because the number of beneficiaries is small.