In this paper we test the hypothesis of strategic interaction in the provision of elderlycare services across Swedish local governments. The theoretical model used for this purposedi¤ers from that presented by Brueckner (2000) in that the elderly (poor) are not allowedto migrate but the workers (rich) who pay for the elderly care are. The empirical analysisis based on a data set covering Swedish municipalities during the period between 2003 and2011, and a spatial lag econometric model is applied to estimate reaction functions. Theresults provide no clear-cut evidence for strategic interactions in the provision of elderly careservices which contradicts some previous research in this area.