Abstract
The main purpose of this paper is to clarify critical determinants of social welfare expenditure for the elderly in local government in Japan. In general, as reasons why the amount of social welfare expenditure increased; 1) the rapid increasing of elderly generation, and 2) recent improvement of action in national policy for elderly people are considered. However, it is also claimed that 1) cutting down in the ratio of national contribution to local government, on the one hand, encourages them to be more autonomous in budget allocation, and, on the other hand, may cause an undesirable budget shortage to perform some important public elderly care program, and 2) there is, what is called,budget incrementalizm in deciding their budget to keep desirable size of pie.
I empolyed the regression estimation to find the most critical factor which influence the amount of social welfare expenditure by using macro and micro local government settlement acount data.
The result of my estimation are as follow; 1) no definite influence of cutting of national contribution on the amount of expenditure was found,2)budget incrementalizm in public expenditure was statistically significantly observed, and 3) relationship between a magnitude of residential needs for the elderly care and an amount of settled account seemed not to exist.
Considering an expected and a various increase in requirment of elderly care needs in advanced aging society, the budget incrementalizm observed in local finance policy is not expected. It is sure to be important to install the incentive mechanism into the process of deciding the budget in local government and disbursing national contribution to fit the needs.
