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Towards a European Union Child Basic Income? Within and between country effects

  • Levy, Horacio
  • Matsaganis, Manos
  • Sutherland, Holly

This paper explores the within and between country distributional implications of an illustrative Child Basic Income (CBI) operated at EU level. Using EUROMOD, we establish that a universal payment of €50 per month per child aged under 6 could take 800,000 children in this age group out of poverty. It could be financed by an EU flat tax of 0.2% on all household income, assuming that it would also be taxed nationally as income. Most member states and virtually all families with children aged under 6 would be net gainers. We simulate two versions of EU CBI, with the benefit rate of €50 per month adjusted or not for differences in purchasing power between member states. In general, fiscal flows between member states, and also poverty reduction, would be smaller under the adjusted version. The political feasibility of such a scheme might be questioned, especially within the net contributor countries. Nevertheless, for those seeking ways to strengthen solidarity across national boundaries, a scheme supporting the incomes of families with young children, wherever in the EU they might reside “could be a demonstration of the EU‟s commitment to children, to the future†(EC 2012a: 62).

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File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/euromod/em6-13.pdf
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Paper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number EM6/13.

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Date of creation: 28 Mar 2013
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Publication status: published
Handle: RePEc:ese:emodwp:em6-13
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  1. Marcus Tamm, 2010. "Child Benefit Reform and Labor Market Participation," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(3), pages 313-327, June.
  2. repec:ese:iserwp:2006-47 is not listed on IDEAS
  3. Sutherland, Holly & Figari, Francesco, 2013. "EUROMOD: The European Union Tax-Benefit Microsimulation Model," EUROMOD Working Papers EM8/13, EUROMOD at the Institute for Social and Economic Research.
  4. Levy, Horacio & Lietz, Christine & Sutherland, Holly, 2006. "A basic income for Europe's children?," EUROMOD Working Papers EM4/06, EUROMOD at the Institute for Social and Economic Research.
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