Subsidising consumer services: effects on employment, welfare and the informal economy

This is a revised version of a paper presented at the conference on ‘Employment and Growth in the Knowledge-Based Economy’, organised by the OECD and the Danish government, in Copenhagen, 7–8 November 1994. The authors wish to acknowledge useful comments from two anonymous referees. The activities of the Economic Policy Research Unit are supported by a grant from the Danish National Research Foundation.