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Towards a European Union Child Basic Income? Within and between country effects

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Author Info

  • Horacio Levy

    ()
    (OECD)

  • Manos Matsaganis

    ()
    (Athens University of Economics and Business)

  • Holly Sutherland

    ()
    (Institute for Social and Economic Research, University of Essex)

Abstract

This paper explores the within and between country distributional implications of an illustrative Child Basic Income (CBI) operated at EU level. Using EUROMOD, we establish that a universal payment of €50 per month per child aged under 6 could take 800,000 children in this age group out of poverty. It could be financed by an EU flat tax of 0.2% on all household income, assuming that it would also be taxed nationally as income. Most member states and virtually all families with children aged under 6 would be net gainers. We simulate two versions of EU CBI, with the benefit rate of €50 per month adjusted or not for differences in purchasing power between member states. In general, fiscal flows between member states, and also poverty reduction, would be smaller under the adjusted version. The political feasibility of such a scheme might be questioned, especially within the net contributor countries. Nevertheless, for those seeking ways to strengthen solidarity across national boundaries, a scheme supporting the incomes of families with young children, wherever in the EU they might reside “could be a demonstration of the EU’s commitment to children, to the future” (EC 2012a: 62).

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Bibliographic Info

Article provided by Interational Microsimulation Association in its journal International Journal of Microsimulation.

Volume (Year): 1 (2013)
Issue (Month): 6 ()
Pages: 63-85

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Handle: RePEc:ijm:journl:v:volnum:1:2013:i:6:p:63-85

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Web page: http://ima.natsem.canberra.edu.au/index.htm

Related research

Keywords: Child Basic Income; European Union; Microsimulation;

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  1. Marcus Tamm, 2009. "Child Benefit Reform and Labor Market Participation," Ruhr Economic Papers 0097, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. repec:ese:iserwp:2006-47 is not listed on IDEAS
  3. repec:ese:emodwp:em4-06 is not listed on IDEAS
  4. Holly Sutherland & Francesco Figari, 2013. "EUROMOD: the European Union tax-benefit microsimulation model," International Journal of Microsimulation, Interational Microsimulation Association, vol. 1(6), pages 4-26.
  5. repec:ese:emodwp:em8-13 is not listed on IDEAS
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