IDEAS home Printed from https://ideas.repec.org/p/lis/liswps/799.html
   My bibliography  Save this paper

Inequality, Poverty and Child Benefits: Evidence from a Natural Experiment

Author

Listed:
  • Piotr Paradowski
  • Joanna Wolszczak-Derlacz
  • Eva Sierminska

Abstract

We assess the impact of a new policy action in the form of cash child benefit introduced in Poland in 2016 (the program Family 500 +) on inequality and poverty. The analysis is based on micro-level household data from the Luxembourg Income Study (LIS) and Statistics Poland. We examine the changes in various indicators of inequality and poverty (Gini index, subjective and relative poverty rates) and their decomposition. We find evidence that the program substantially reduces inequality and poverty. This is confirmed by difference-in-difference estimation, in which treated and non-treated households are compared before and after the program’s introduction.

Suggested Citation

  • Piotr Paradowski & Joanna Wolszczak-Derlacz & Eva Sierminska, 2020. "Inequality, Poverty and Child Benefits: Evidence from a Natural Experiment," LIS Working papers 799, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:799
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/liswps/799.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Martin Evans & Alejandra Hidalgo & Mei Wang, 2018. "Universal Child Allowances in 14 Middle Income Countries: Options for Policy and Poverty Reduction," LIS Working papers 738, LIS Cross-National Data Center in Luxembourg.
    2. repec:pri:rpdevs:deaton_price_indexes_inequality_and_the_measurement_of_world_poverty_aer. is not listed on IDEAS
    3. de Boer, Henk-Wim & Jongen, Egbert L.W. & Kabatek, Jan, 2022. "The effectiveness of fiscal stimuli for working parents," Labour Economics, Elsevier, vol. 76(C).
    4. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
    5. Miles Corak & Michael Fertig & Marcus Tamm, 2008. "A Portrait Of Child Poverty In Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 547-571, December.
    6. Azevedo, Joao Pedro & Sanfelice, Viviane & Nguyen, Minh C., 2012. "Shapley Decomposition by Components of a Welfare Aggregate," MPRA Paper 85584, University Library of Munich, Germany.
    7. Howard White & Edward Anderson, 2001. "Growth versus Distribution: Does the Pattern of Growth Matter?," Development Policy Review, Overseas Development Institute, vol. 19(3), pages 267-289, September.
    8. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    9. José Roche, 2013. "Monitoring Progress in Child Poverty Reduction: Methodological Insights and Illustration to the Case Study of Bangladesh," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(2), pages 363-390, June.
    10. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    11. Stanislav Kolenikov & Anthony Shorrocks, 2005. "A Decomposition Analysis of Regional Poverty in Russia," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 25-46, February.
    12. Lebihan, Laetitia & Mao Takongmo, Charles-Olivier, 2018. "The impact of universal child benefits on family health and behaviours," Research in Economics, Elsevier, vol. 72(4), pages 415-427.
    13. Wen-Hao Chen & Miles Corak, 2008. "Child poverty and changes in child poverty," Demography, Springer;Population Association of America (PAA), vol. 45(3), pages 537-553, August.
    14. Lucia Hanmer & Felix Naschold, 2000. "Attaining the International Development Targets: Will Growth Be Enough?," Development Policy Review, Overseas Development Institute, vol. 18(1), pages 11-36, March.
    15. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    16. Jenkins, Stephen P. & Micklewright, John (ed.), 2007. "Inequality and Poverty Re-Examined," OUP Catalogue, Oxford University Press, number 9780199218127.
    17. Anthony Shorrocks, 2013. "Decomposition procedures for distributional analysis: a unified framework based on the Shapley value," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 99-126, March.
    18. Angus Deaton, 2010. "Price Indexes, Inequality, and the Measurement of World Poverty," American Economic Review, American Economic Association, vol. 100(1), pages 5-34, March.
    19. Puhani, Patrick A., 2012. "The treatment effect, the cross difference, and the interaction term in nonlinear “difference-in-differences” models," Economics Letters, Elsevier, vol. 115(1), pages 85-87.
    20. Marla Cancian & Deborah Reed, "undated". "Family Structure, Childbearing, and Parental Employment: Implications for the Level and Trend in Poverty," Mathematica Policy Research Reports c54934d6dfb5438485437cf48, Mathematica Policy Research.
    21. Bettendorf, Leon J.H. & Jongen, Egbert L.W. & Muller, Paul, 2015. "Childcare subsidies and labour supply — Evidence from a large Dutch reform," Labour Economics, Elsevier, vol. 36(C), pages 112-123.
    22. repec:pri:rpdevs:presidential%20address%2017january%202010%20all.pdf is not listed on IDEAS
    23. Thomas Piketty, 2015. "About Capital in the Twenty-First Century," American Economic Review, American Economic Association, vol. 105(5), pages 48-53, May.
    24. Armando Barrientos & Jocelyn DeJong, 2006. "Reducing Child Poverty with Cash Transfers: A Sure Thing?," Development Policy Review, Overseas Development Institute, vol. 24(5), pages 537-552, September.
    25. repec:mpr:mprres:6419 is not listed on IDEAS
    26. Gornick, Janet C. & Jäntti, Markus, 2012. "Child poverty in cross-national perspective: Lessons from the Luxembourg Income Study," Children and Youth Services Review, Elsevier, vol. 34(3), pages 558-568.
    27. Nanak Kakwani & Xiaobing Wang & Jing Xu & Ximing Yue, 2020. "Assessing the Social Welfare Effects of Government Transfer Programs: Some International Comparisons," LIS Working papers 786, LIS Cross-National Data Center in Luxembourg.
    28. Daniel Lichter & Zhenchao Qian & Leanna Mellott, 2006. "Marriage or dissolution? Union transitions among poor cohabiting women," Demography, Springer;Population Association of America (PAA), vol. 43(2), pages 223-240, May.
    29. Robert C. Allen, 2017. "Absolute Poverty: When Necessity Displaces Desire," American Economic Review, American Economic Association, vol. 107(12), pages 3690-3721, December.
    30. Laura Tach & Alicia Eads, 2015. "Trends in the Economic Consequences of Marital and Cohabitation Dissolution in the United States," Demography, Springer;Population Association of America (PAA), vol. 52(2), pages 401-432, April.
    31. Iga Magda & Aneta Kielczewska & Nicola Brandt, 2018. "The “Family 500+” child allowance and female labour supply in Poland," IBS Working Papers 01/2018, Instytut Badan Strukturalnych.
    32. Bruce Bradbury & Markus Jäntti & Lena Lindahl, 2019. "Labour Income, Social Transfers and Child Poverty," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 251-276, May.
    33. Goraus Tanska,Karolina Marta & Inchauste Comboni,Maria Gabriela, 2016. "The distributional impact of taxes and transfers in Poland," Policy Research Working Paper Series 7787, The World Bank.
    34. Havnes, Tarjei & Mogstad, Magne, 2015. "Is universal child care leveling the playing field?," Journal of Public Economics, Elsevier, vol. 127(C), pages 100-114.
    35. Joao Pedro Azevedo & Minh Cong Nguyen & Viviane Sanfelice, 2012. "ADECOMP: Stata module to estimate Shapley Decomposition by Components of a Welfare Measure," Statistical Software Components S457562, Boston College Department of Economics, revised 12 Jan 2019.
    36. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    37. Yekaterina Chzhen & Lucia Ferrone, 2017. "Multidimensional Child Deprivation and Poverty Measurement: Case Study of Bosnia and Herzegovina," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 999-1014, April.
    38. Kerris Cooper & Kitty Stewart, 2013. "Does money affect children’s outcomes?," CASE Reports casereport80, Centre for Analysis of Social Exclusion, LSE.
    39. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    40. Klaas de Vos & Thesia I. Garner, 1991. "An Evaluation Of Subjective Poverty Definitions: Comparing Results From The U.S. And The Netherlands," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 267-285, September.
    41. Francois Bourguignon, 2004. "The Poverty-growth-inequality triangle," Indian Council for Research on International Economic Relations, New Delhi Working Papers 125, Indian Council for Research on International Economic Relations, New Delhi, India.
    42. Robert C. Allen, 2017. "Absolute Poverty: When Necessity Displaces Desire REVISED," Working Papers 20170005, New York University Abu Dhabi, Department of Social Science, revised Jun 2017.
    43. Peter Whiteford & Willem Adema, 2007. "What Works Best in Reducing Child Poverty: A Benefit or Work Strategy?," OECD Social, Employment and Migration Working Papers 51, OECD Publishing.
    44. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Filip Premik, 2021. "Estimating the effects of universal transfers: new ML approach and application to labor supply reaction to child benefits," GRAPE Working Papers 54, GRAPE Group for Research in Applied Economics.
    2. Barbara Liberda & Katarzyna Sałach & Marek Pęczkowski, 2023. "The Effects of Child Benefit on Household Saving," Journal of Family and Economic Issues, Springer, vol. 44(2), pages 447-460, June.
    3. Filip Premik, 2022. "Evaluating Poland’s Family 500+ Child Support Programme," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 1-19.
    4. Stefani Milovanska-Farrington, 2022. "The effect of child benefits on financial difficulties and spending habits: evidence from Poland’s Family 500 + program," International Economics and Economic Policy, Springer, vol. 19(4), pages 719-739, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yingfeng Fang & Fen Zhang, 2021. "The Future Path To China’s Poverty Reduction—Dynamic Decomposition Analysis With The Evolution Of China’s Poverty Reduction Policies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 507-538, December.
    2. Mager, Gregor & Faße, Anja, 2021. "The Contribution of Smallholders´ Livelihood Activities on Income Inequality and Poverty: Case Study from Rural Tanzania," 2021 Conference, August 17-31, 2021, Virtual 315405, International Association of Agricultural Economists.
    3. Rasmus Heltberg, 2002. "The Poverty Elasticity of Growth," WIDER Working Paper Series DP2002-21, World Institute for Development Economic Research (UNU-WIDER).
    4. Sebastian Levine & Benjamin Roberts, 2013. "Robust Estimates of Changes in Poverty and Inequality in Post-Independence Namibia," South African Journal of Economics, Economic Society of South Africa, vol. 81(2), pages 167-191, June.
    5. Azevedo, Joao Pedro & Inchauste, Gabriela & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2013. "Is labor income responsible for poverty reduction ? a decomposition approach," Policy Research Working Paper Series 6414, The World Bank.
    6. Kalwij, Adriaan & Verschoor, Arjan, 2007. "Not by growth alone: The role of the distribution of income in regional diversity in poverty reduction," European Economic Review, Elsevier, vol. 51(4), pages 805-829, May.
    7. Kseniya Abanokova & Hai-Anh H. Dang, 2023. "Poverty in Russia: a bird’s-eye view of trends and dynamics in the past quarter of a century," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 58, pages 627-635, Edward Elgar Publishing.
    8. Guanghua Wan & Chen Wang & Hua Yin & Yan Zhang, 2018. "From Equality of Deprivation to Disparity of Prosperity: The Poverty–Growth–Inequality Triangle in Post†reform China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(2), pages 50-67, March.
    9. Sırma Şeker & Stephen Jenkins, 2015. "Poverty trends in Turkey," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 401-424, September.
    10. Alessandra Brito & Miguel Foguel & Celia Kerstenetzky, 2017. "The contribution of minimum wage valorization policy to the decline in household income inequality in Brazil: A decomposition approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 40(4), pages 540-575, October.
    11. Adriaan Kalwij & Arjan Verschoor, 2005. "A Decomposition of Poverty Trends Across Regions: the Role of Variation in the Income and Inequality Elasticities of Poverty," WIDER Working Paper Series RP2005-36, World Institute for Development Economic Research (UNU-WIDER).
    12. Sédi-Anne Boukaka & Giulia Mancini & Giovanni Vecchi, 2021. "Poverty and inequality in Francophone Africa, 1960s–2010s," Economic History of Developing Regions, Taylor & Francis Journals, vol. 36(1), pages 1-29, January.
    13. Iniguez-Montiel, Alberto Javier, 2014. "Growth with Equity for the Development of Mexico: Poverty, Inequality, and Economic Growth (1992–2008)," World Development, Elsevier, vol. 59(C), pages 313-326.
    14. Ferreira, Francisco H.G. & Ravallion, Martin, 2008. "Global poverty and inequality : a review of the evidence," Policy Research Working Paper Series 4623, The World Bank.
    15. Dörffel, Christoph & Freytag, Andreas, 2023. "The poverty effect of democratization," World Development, Elsevier, vol. 165(C).
    16. Fujii, Tomoki, 2017. "Dynamic Poverty Decomposition Analysis: An Application to the Philippines," World Development, Elsevier, vol. 100(C), pages 69-84.
    17. Tomoki Fujii, 2015. "Poverty decomposition by regression: An application to Tanzania," Working Papers e097, Tokyo Center for Economic Research.
    18. Guanghua Wan, 2006. "Poverty Accounting by Factor Components: With an Empirical Illustration Using Chinese Data," WIDER Working Paper Series RP2006-63, World Institute for Development Economic Research (UNU-WIDER).
    19. Fujii Tomoki, 2015. "Poverty decomposition by regression," WIDER Working Paper Series 102, World Institute for Development Economic Research (UNU-WIDER).
    20. Balcazar Salazar,Carlos Felipe & Desai,Sonal & Murgai,Rinku & Narayan,Ambar, 2016. "Why did poverty decline in India ? a nonparametric decomposition exercise," Policy Research Working Paper Series 7602, The World Bank.

    More about this item

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:liswps:799. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.