OECD Social, Employment and Migration Working Papers

ISSN :
1815-199X (online)
DOI :
10.1787/1815199x
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This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language - English or French - with a summary in the other.
 

Money or Kindergarten? Distributive Effects of Cash Versus In-Kind Family Transfers for Young Children You or your institution have access to this content

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Author(s):
Michael F. Förster1, Gerlinde Verbist2
Author Affiliations
  • 1: OECD, France

  • 2: University of Antwerp, Belgium

Publication Date
11 Sep 2012
Bibliographic information
No.:
135
Pages
64
DOI
10.1787/5k92vxbgpmnt-en

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Public support to families with pre-school children can be in the form of cash benefits (e.g. child allowances) or of "in-kind" support (e.g. care services such as kindergartens). The mix of these support measures varies greatly across OECD countries, from a cash / in-kind composition of 10%/90% to 80%/20%. This paper imputes the value of services into an "extended" household income and compares the resulting distributive patterns and the redistributive effect of these two strands of family policies. On average, cash and in-kind transfers each constitute 7 – 8% of the incomes of families with young children. Both instruments are redistributive. Cash transfers reduce child poverty by one third, with the estimated impacts in Austria, Ireland, Sweden, Hungary and Finland performing above average. When services are accounted for, child poverty falls by one quarter and poverty among children enrolled in childcare is more than halved. This reduction is highest in Belgium, France, Hungary, Iceland and Sweden.
Keywords:
child poverty, income distribution, cash and in-kind transfers, family policy
JEL Classification:
  • D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
  • H40: Public Economics / Publicly Provided Goods / General
  • I38: Health, Education, and Welfare / Welfare and Poverty / Government Policy; Provision and Effects of Welfare Programs
  • J13: Labor and Demographic Economics / Demographic Economics / Fertility; Family Planning; Child Care; Children; Youth