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

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

Abstract

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).

Suggested Citation

  • Levy, Horacio & Matsaganis, Manos & Sutherland, Holly, 2013. "Towards a European Union Child Basic Income? Within and between country effects," EUROMOD Working Papers EM6/13, EUROMOD at the Institute for Social and Economic Research.
  • Handle: RePEc:ese:emodwp:em6-13
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    File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/euromod/em6-13.pdf
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    References listed on IDEAS

    as
    1. Holly Sutherland & Francesco Figari, 2013. "EUROMOD: the European Union tax-benefit microsimulation model," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 4-26.
    2. Levy, Horacio & Lietz, Christine & Sutherland, Holly, 2006. "A basic income for Europe's children?," ISER Working Paper Series 2006-47, Institute for Social and Economic Research.
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    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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