Do earmarked grants to care services reduce investments in other sectors? An analysis of the investment grant scheme in Care Plan 2020

Introduction: The Norwegian care sector is a municipal responsibility, but financing is a central state responsibility. This means that the responsibility for financing and production is divided between two different governmental levels. The use of earmarked grants is a common policy instrument used by the central state to influence prioritization in the municipalities. Earlier studies have shown that the earmarked grants for housing in the care sector has worked as intended. However, little attention has been paid to the effects the earmarked grants can have on other sectors. In this article we ask whether the earmarked grants for housing has led to less investments in other areas, such as culture, schooling and kindergartens. Methods: Data on investment plans at municipal level were provided by the Norwegian Housing Bank, and linked to data describing the municipalities’ financing and local needs, which were provided by Statistics Norway and NSD (Norwegian Centre for Research Data). We studied the effect of earmarked grants to nursing homes and care homes on kindergartens and primary schools using difference-in-difference estimation. Results: No results are available yet, but will be for the conference. Discussions: If the earmarked grants affect spending or investments in other sectors, it indicates that the use of earmarked grants needs to be the subject of a broad evaluation. Merely focusing on whether the intended effect is reached in one sector is inadequate for evaluation purposes. Conclusion: No results are available yet, but will be for the conference. Lessons learned: No results are available yet, but will be for the conference. Limitations: We have all relevant data from Norway, and as such, we see no specific data limitations that hinder our availability to draw inferences about the effects of the Norwegian investment grant scheme. Suggestions for future research: More research should be done in order to see whether the findings are relevant for other countries and other healthcare systems.