Alternative tax-benefit strategies to support children in Poland
Eurostat data shows that children and elderly are especially at risk of being in poverty. In 2004 the average rates of poverty risk in the European Union for these groups were about 19%. In Poland, the rate was 29% for children and only 7% for the elderly. We examine the role of the tax-benefit system in explaining this situation and analyse how much child poverty figures could change under several reform scenarios. In 2005, families with children were mainly supported by a means-tested family allowance and some supplements. This was extended in 2007 with the introduction of a non-refundable child tax credit. Making use of the European tax-benefit microsimulation model EUROMOD, this paper assesses the consequences of the recent reform in Poland. We examine theoutcome in comparison to child policies in three other European systems and show that poverty reduction would have been more pronounced, if child policies were changed along the lines of the system in France or the United Kingdom. The Austrian system - relying primarily on universal benefits - would bring about a similar reduction in the poverty rate but with much greater reduction in the poverty gap. The paper presents detailed distributional analysis under the different systems assuming the cost of â€œimportingâ€ each of them to be the same as that of introducing the 2007 reform.
|Date of creation:||01 Jun 2008|
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- Herwig Immervoll & Cathal O'Donoghue, 2003.
"Towards A Multi-Purpose Framework For Tax-Benefit Microsimulation,"
- Immervoll, Herwig & O'Donoghue, Cathal, 2001. "Towards a multi purpose framework for tax benefit microsimulation," EUROMOD Working Papers EM2/01, EUROMOD at the Institute for Social and Economic Research.
- Sutherland, Holly, 2001. "EUROMOD: an integrated European benefit-tax model: final report," EUROMOD Working Papers EM9/01, EUROMOD at the Institute for Social and Economic Research.
- Matsaganis, Manos & O'Donoghue, Cathal & Levy, Horacio & Coromaldi, Manuela & Mercader-Prats, M. & Rodrigues, Carlos Farinha & Toso, Stefano & Tsakloglou, Panos, 2004.
"Child poverty and family transfers in Southern Europe,"
EUROMOD Working Papers
EM2/04, EUROMOD at the Institute for Social and Economic Research.
- Matsaganis, Manos & O'Donoghue, Cathal & Levy, Horacio & Coromaldi, Manuela & Mercader-Prats, Magda & Rodrigues, Carlos Farinha & Toso, Stefano & Tsakloglou, Panos, 2005. "Child Poverty and Family Transfers in Southern Europe," IZA Discussion Papers 1509, Institute for the Study of Labor (IZA).
- Beckerman, W, 1979. "The Impact of Income Maintenance Payments on Poverty in Britain, 1975," Economic Journal, Royal Economic Society, vol. 89(354), pages 261-79, June.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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