A Theory of Child Targeting
AbstractThere is a large empirical literature on policy measures targeted at children but surprisingly very little theoretical foundation to ground the debate on the optimality of the different instruments. In the present paper, we examine the merit of targeting children through two general policies, namely selective commodity taxation and cash transfer to family with children. We consider a household that comprises an adult and a child. The household behavior is described by the maximization of the adult’s utility function, which depends on the child’s welfare, subject to a budget constraint. The relative effects of a price subsidy and of a cash benefit on child welfare are then derived. In particular, it is shown that ‘favorable’ distortions from the price subsidies may allow to redistribute toward the child. The framework is extended to account for possible paternalistic preferences of the State. Finally, it is shown that, in contrast to the traditional view, well-chosen subsidies can be more cost effective than cash transfers in alleviating child poverty.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by School Of Economics, University College Dublin in its series Working Papers with number 200703.
Length: 31 pages
Date of creation: 16 Mar 2007
Date of revision:
commodity taxation; child benefit; targeting; intrahousehold distribution; social welfare; paternalism; labeling;
Other versions of this item:
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ravi Kanbur & Michael Keen & Matti Tuomala, 1990.
"Optimal Non-Linear Income Taxation for the Alleviation of Income Poverty,"
799, Queen's University, Department of Economics.
- Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Optimal non-linear income taxation for the alleviation of income-poverty," European Economic Review, Elsevier, vol. 38(8), pages 1613-1632, October.
- Kanbur, R. & Keen, M. & Tuomala, M., 1990. "Optimal Non-Linear Income Taxation for the Alleviation of Income Poverty," The Warwick Economics Research Paper Series (TWERPS) 368, University of Warwick, Department of Economics.
- Kanbur, Ravi & Keen, Michael & Toumala, Matti, 1991. "Optimal non-linear income taxation for the alleviation of income poverty," Policy Research Working Paper Series 616, The World Bank.
- Besley, Timothy, 1988. "A simple model for merit good arguments," Journal of Public Economics, Elsevier, vol. 35(3), pages 371-383, April.
- Rees, Ray, 1988. "Taxation and the Household," Munich Reprints in Economics 3411, University of Munich, Department of Economics.
- Gregg, Paul & Waldfogel, Jane & Washbrook, Elizabeth, 2006. "Family expenditures post-welfare reform in the UK: Are low-income families starting to catch up?," Labour Economics, Elsevier, vol. 13(6), pages 721-746, December.
- Haddad, Lawrence & Kanbur, Ravi, 1991.
"Intrahousehold inequality and the theory of targeting,"
Policy Research Working Paper Series
789, The World Bank.
- Haddad, Lawrence & Kanbur, Ravi, 1992. "Intrahousehold inequality and the theory of targeting," European Economic Review, Elsevier, vol. 36(2-3), pages 372-378, April.
- Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
- Deaton, Angus, 1979. "Optimally uniform commodity taxes," Economics Letters, Elsevier, vol. 2(4), pages 357-361.
- Schroyen, Fred, 2005. "An alternative way to model merit good arguments," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 957-966, June.
- Keen, Michael, 1992.
"Needs and Targeting,"
Royal Economic Society, vol. 102(410), pages 67-79, January.
- Laura Blow & Ian Walker & Yu Zhu, 2012.
"Who Benefits From Child Benefit?,"
Western Economic Association International, vol. 50(1), pages 153-170, 01.
- Blow, Laura & Walker, Ian & Zhu, Yu, 2006. "Who benefits from Child Benefit?," The Warwick Economics Research Paper Series (TWERPS) 749, University of Warwick, Department of Economics.
- Laura Blow & Ian Walker & Yu Zhu, 2007. "Who Benefits from Child Benefit?," Working Papers 200716, Geary Institute, University College Dublin.
- Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1138-59, October.
- Gronau, Reuben, 1991. "The Intrafamily Allocation of Goods--How to Separate the Adult from the Child," Journal of Labor Economics, University of Chicago Press, vol. 9(3), pages 207-35, July.
- Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
- Gary S. Becker, 1974.
"A Theory of Social Interactions,"
NBER Working Papers
0042, National Bureau of Economic Research, Inc.
- Besley, Timothy J & Kanbur, S M Ravi, 1988. "Food Subsidies and Poverty Alleviation," Economic Journal, Royal Economic Society, vol. 98(392), pages 701-19, September.
- Richard Dickens & David T Ellwood, 2003. "Child Poverty in Britain and the United States," Economic Journal, Royal Economic Society, vol. 113(488), pages F219-F239, 06.
- Cigno, Alessandro & Luporini, Annalisa & Pettini, Anna, 2003.
"Transfers to families with children as a principal-agent problem,"
Journal of Public Economics,
Elsevier, vol. 87(5-6), pages 1165-1177, May.
- Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2000. "Transfers to Families with Children as a Principal-Agent Problem," CESifo Working Paper Series 351, CESifo Group Munich.
- Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2000. "Tranfers to families with children as a principal-agent problem," CHILD Working Papers wp02_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Sam Allgood & Arthur Snow, 1998. "The Marginal Cost of Raising Tax Revenue and Redistributing Income," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1246-1273, December.
- Besley, Timothy, 1990. "Means Testing versus Universal Provision in Poverty Alleviation Programmes," Economica, London School of Economics and Political Science, vol. 57(225), pages 119-29, February.
- Christiansen, Vidar, 1983. " Some Important Properties of the Social Marginal Utility of Income," Scandinavian Journal of Economics, Wiley Blackwell, vol. 85(3), pages 359-71.
- Edmonds, Eric, 2002. "Reconsidering the labeling effect for child benefits: evidence from a transition economy," Economics Letters, Elsevier, vol. 76(3), pages 303-309, August.
- Peter Kooreman, 2000. "The Labeling Effect of a Child Benefit System," American Economic Review, American Economic Association, vol. 90(3), pages 571-583, June.
- repec:fth:prinin:468 is not listed on IDEAS
- Sutherland, Holly & Piachaud, David, 2001. "Reducing Child Poverty in Britain: An Assessment of Government Policy 1997-2001," Economic Journal, Royal Economic Society, vol. 111(469), pages F85-101, February.
- Gronau, Reuben, 1988. "Consumption Technology and the Intrafamily Distribution of Resources:," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1183-1205, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicolas Clifton).
If references are entirely missing, you can add them using this form.