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Targeting and child poverty

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  • Olivier Bargain
  • Olivier Donni

Abstract

We examine the relative merits of targeting children within the household through price subsidies and cash transfers. To do so, we model the behavior of a household composed of one adult and one child. We then show that ‘favorable’ distortions from price subsidies may allow redistributing toward the child and then derive the conditions under which this redistributive scheme is more efficient than cash transfers. The framework is extended to account for possible paternalistic preferences of the social planner and for households composed of two adults with different preferences. Applied to a continuum of households, our approach is extended to the problem of child poverty alleviation. In contrast to the traditional view, we show that well-chosen subsidies may be more cost effective than cash transfers in reducing child poverty. Copyright Springer-Verlag 2012

Suggested Citation

  • Olivier Bargain & Olivier Donni, 2012. "Targeting and child poverty," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(4), pages 783-808, October.
    • Handle: RePEc:spr:sochwe:v:39:y:2012:i:4:p:783-808
    DOI: 10.1007/s00355-011-0556-z
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Transfers to mothers may hurt children
      by Economic Logician in Economic Logic on 2011-05-19 19:39:00

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    1. Olivier Bargain & Olivier Donni, 2014. "Optimal Commodity Taxation and Redistribution within Households," Economica, London School of Economics and Political Science, vol. 81(321), pages 48-62, January.
    2. Chavas, Jean-Paul & Menon, Martina & Pagani, Elisa & Perali, Federico, 2018. "Collective household welfare and intra-household inequality," Theoretical Economics, Econometric Society, vol. 13(2), May.
    3. Bargain, Olivier & Donni, Olivier & Kwenda, Prudence, 2014. "Intrahousehold distribution and poverty: Evidence from Côte d'Ivoire," Journal of Development Economics, Elsevier, vol. 107(C), pages 262-276.
    4. Bargain, Olivier B. & Donni, Olivier, 2009. "The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies," IZA Discussion Papers 4654, Institute of Labor Economics (IZA).
    5. BARGAIN Olivier & DONNI Olivier, 2010. "The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies and Parents’ Bargaining," LISER Working Paper Series 2010-30, Luxembourg Institute of Socio-Economic Research (LISER).

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    More about this item

    JEL classification:

    • 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

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