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The Impact of the German Child Benefit on Child Well-Being

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  • Christian Raschke

Abstract

The German Child Benefit ("Kindergeld") is paid to legal guardians of children as a cash benefit. This study employs exogenous variations in the amount of child benefit received by households to investigate the extent to which these various changes have translated into an improvement in the circumstances of children related to their well-being. I use the German Socio-Economic Panel to estimate the impact of a given change in the child benefit on food expenditures of households, the probability of owning a home, the size of the home, as well as the probability of parents' smoking, alcohol consumption, and parents' social activities such as traveling, visiting movie theaters, going to pop concerts, attending classical music concerts or other cultural events. Households primarily increase per capita food expenditures in response to increases in child benefit, and they also improve housing conditions. I do not find a significant effect of child benefit on parents' smoking or drinking, but parents of older children use the child benefit to pay for their social and personal entertainment activities.

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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 520.

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Length: 59 p.
Date of creation: 2012
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp520

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Keywords: child benefit; fungibility of income; child well-being;

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  1. Marcus Tamm, 2009. "Child Benefit Reform and Labor Market Participation," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0097, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Cheng Kai-Wen & Kenkel Don S, 2010. "U.S. Cigarette Demand: 1944-2004," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 10(1), pages 1-21, August.
  3. Coleman-Jensen, Alisha & Nord, Mark & Andrews, Margaret S. & Carlson, Steven, 2011. "Household Food Security in the United States in 2010," Economic Research Report, United States Department of Agriculture, Economic Research Service 118021, United States Department of Agriculture, Economic Research Service.
  4. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number beck81-1.
  5. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(6), pages 988-1010, December.
  6. Nord, Mark & Andrews, Margaret S. & Carlson, Steven, 2002. "Household Food Security In The United States, 2001," Food Assistance and Nutrition Research Reports, United States Department of Agriculture, Economic Research Service 33865, United States Department of Agriculture, Economic Research Service.
  7. Christopher J. Ruhm, 2000. "Are Recessions Good For Your Health?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 115(2), pages 617-650, May.
  8. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
  9. Ruhm, Christopher J., 2005. "Healthy living in hard times," Journal of Health Economics, Elsevier, Elsevier, vol. 24(2), pages 341-363, March.
  10. James Mabli & Laura Castner & James Ohls & Mary Kay Fox & Mary Kay Crepinsek & Elizabeth Condon, 2010. "Food Expenditures and Diet Quality Among Low-Income Households and Individuals," Mathematica Policy Research Reports, Mathematica Policy Research 6732, Mathematica Policy Research.
  11. Daniel Aaronson, 1999. "A note on the benefits of homeownership," Working Paper Series, Federal Reserve Bank of Chicago WP-99-23, Federal Reserve Bank of Chicago.
  12. Schady, Norbert & Rosero, José, 2008. "Are cash transfers made to women spent like other sources of income?," Economics Letters, Elsevier, Elsevier, vol. 101(3), pages 246-248, December.
  13. Cutler, David M. & Lleras-Muney, Adriana, 2010. "Understanding differences in health behaviors by education," Journal of Health Economics, Elsevier, Elsevier, vol. 29(1), pages 1-28, January.
  14. Goux, Dominique & Maurin, Eric, 2005. "The effect of overcrowded housing on children's performance at school," Journal of Public Economics, Elsevier, Elsevier, vol. 89(5-6), pages 797-819, June.
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