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Targeting and Child Poverty

  • Donni Olivier
  • Bargain Olivier

    ()

    (THEMA, Universite de Cergy-Pontoise
    University College of Dublin, CHILD and IZA)

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 e¢ cient than cash trans- fers. The framework is extended to account for possible paternalistic preferences of the social planner and for households composed of two adults with different pref- erences. 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 e¤ective than cash transfers in reducing child poverty.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2011-05.

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Date of creation: 2011
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Handle: RePEc:ema:worpap:2011-05
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  1. Martin Browning & Pierre-Andre Chiappori, 1994. "Efficient Intra-Household Allocations: a General Characterization and Empirical Tests," Department of Economics Working Papers 1994-02, McMaster University.
  2. repec:cup:cbooks:9780521296762 is not listed on IDEAS
  3. 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.
  4. Haddad, Lawrence & Kanbur, Ravi, 1991. "Intrahousehold inequality and the theory of targeting," Policy Research Working Paper Series 789, The World Bank.
  5. Besley, Timothy, 1988. "A simple model for merit good arguments," Journal of Public Economics, Elsevier, vol. 35(3), pages 371-383, April.
  6. Geoffrey R. Dunbar & Arthur Lewbel & Krishna Pendakur, 2013. "Children's Resources in Collective Households: Identification, Estimation, and an Application to Child Poverty in Malawi," American Economic Review, American Economic Association, vol. 103(1), pages 438-71, February.
  7. Cremer, Helmuth & Pestieau, Pierre, 2001. "Non-linear taxation of bequests, equal sharing rules and the tradeoff between intra- and inter-family inequalities," Journal of Public Economics, Elsevier, vol. 79(1), pages 35-53, January.
  8. Sonia Bhalotra & Cliff Attfield, 1998. "Intrahousehold resource allocation in rural Pakistan: a semi-parametric analysis," LSE Research Online Documents on Economics 6679, London School of Economics and Political Science, LSE Library.
  9. Bourguignon, F., 1999. "The Cost of Children: May the Collective Approach to Household Behavior Help?," DELTA Working Papers 1999-01, DELTA (Ecole normale supérieure).
  10. 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.
  11. Anyck Dauphin & Abdel-Rahmen El Lahga & Bernard Fortin & Guy Lacroix, 2008. "Are Children Decision-Makers Within the Household?," Cahiers de recherche 0829, CIRPEE.
  12. Peter Kooreman, 2000. "The Labeling Effect of a Child Benefit System," American Economic Review, American Economic Association, vol. 90(3), pages 571-583, June.
  13. 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.
  14. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
  15. Olivier Donni, 2009. "A Simple Approach to Investigate Intrahousehold Allocation of Private and Public Goods," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 617-628, August.
  16. 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.
  17. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
  18. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-83, June.
  19. Deaton, Angus, 1979. "Optimally uniform commodity taxes," Economics Letters, Elsevier, vol. 2(4), pages 357-361.
  20. 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.
  21. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  22. 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.
  23. 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.
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