Semiparametric Base-Independent Equivalence Scales and the Cost of Children in Switzerland
How much additional income does a couple with two children need to be equally well-off as a childless couple? This question is important for public policy decisions on social benefits or child allowances. Since equivalence scales express the change in the cost of attaining a certain welfare level when the household size and composition varies, they provide an answer. This paper provides semiparametric estimates of consumption-based equivalence scales by applying the extended partially linear model to the Swiss Household Budget Survey 2000-2005. The results permit welfare comparisons across households and provide an indirect measure of the cost of children.
Volume (Year): 148 (2012)
Issue (Month): I (March)
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