IDEAS home Printed from https://ideas.repec.org/p/oec/elsaab/135-en.html
   My bibliography  Save this paper

Money or Kindergarten? Distributive Effects of Cash Versus In-Kind Family Transfers for Young Children

Author

Listed:
  • Michael Förster

    (OECD)

  • Gerlinde Verbist

    (University of Antwerp)

Abstract

Public support to families with pre-school children can be in the form of cash benefits (e.g. child allowances) or of “in-kind” support (e.g. care services such as kindergartens). The mix of these support measures varies greatly across OECD countries, from a cash / in-kind composition of 10%/90% to 80%/20%. This paper imputes the value of services into an “extended” household income and compares the resulting distributive patterns and the redistributive effect of these two strands of family policies. On average, cash and in-kind transfers each constitute 7 – 8% of the incomes of families with young children. Both instruments are redistributive. Cash transfers reduce child poverty by one third, with the estimated impacts in Austria, Ireland, Sweden, Hungary and Finland performing above average. When services are accounted for, child poverty falls by one quarter and poverty among children enrolled in childcare is more than halved. This reduction is highest in Belgium, France, Hungary, Iceland and Sweden. L’aide publique aux familles ayant des enfants en âge préscolaire peut prendre la forme de prestations monétaires (allocations familiales, par exemple) ou en «nature» (par exemple les services de garde tels que les jardins d'enfants). La combinaison de ces mesures de soutien varie considérablement selon les pays de l'OCDE, d’une composition monétaire / ou en « nature » allant de 10%/90% à 80%/20%. Ce document attribue la valeur des services à un revenu « élargi » des ménages et compare les facteurs distributifs résultant et l’effet redistributif de ces deux volets de la politique familiale. En moyenne, les transferts monétaires et en nature constituent chacun 7- 8% des revenus des familles ayant des enfants en bas âge. Les deux instruments sont redistributifs. Les transferts monétaires réduisent la pauvreté infantile d'un tiers, et les effets estimés sont en-dessus de la moyenne en Autriche, Irlande, Suède, Hongrie et en Finlande. Lorsque les services sont pris en compte, la pauvreté infantile chute d'un quart et la pauvreté chez les enfants inscrits dans les services de garde est divisée par deux. Cette réduction est la plus élevée en Belgique, en France, en Hongrie, en Islande et en Suède.

Suggested Citation

  • Michael Förster & Gerlinde Verbist, 2012. "Money or Kindergarten? Distributive Effects of Cash Versus In-Kind Family Transfers for Young Children," OECD Social, Employment and Migration Working Papers 135, OECD Publishing.
  • Handle: RePEc:oec:elsaab:135-en
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1787/5k92vxbgpmnt-en
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aaberge, Rolf & Langørgen, Audun & Mogstad, Magne & Østensen, Marit, 2008. "The Impact of Local Public Services and Geographical Cost of Living Differences on Poverty Estimates," IZA Discussion Papers 3686, Institute for the Study of Labor (IZA).
    2. Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, vol. 92(1), pages 307-322, March.
    3. Irwin Garfinkel & Lee Rainwater & Timothy M. Smeeding, 2006. "A re-examination of welfare states and inequality in rich nations: How in-kind transfers and indirect taxes change the story," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(4), pages 897-919.
    4. Levy, Horacio & Morawski, Leszek & Myck, Michal, 2008. "Alternative tax-benefit strategies to support children in Poland," EUROMOD Working Papers EM3/08, EUROMOD at the Institute for Social and Economic Research.
    5. Aaberge, Rolf & Bhuller, Manudeep & Langørgen, Audun & Mogstad, Magne, 2010. "The distributional impact of public services when needs differ," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 549-562, October.
    6. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
    7. François Marical & Marco Mira d’Ercole & Maria Vaalavuo & Gerlinde Verbist, 2008. "Publicly provided services and the distribution of households' economic resources," OECD Journal: Economic Studies, OECD Publishing, vol. 2008(1), pages 1-38.
    8. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social, Employment and Migration Working Papers 35, OECD Publishing.
    9. Francesco Figari & Alari Paulus & Holly Sutherland, 2009. "Measuring the size and impact of public cash support for children in cross-national perspective," Working Papers 024, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    10. 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 333-383, June.
    11. Immervoll, Herwig & Richardson, Linda, 2011. "Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades?," IZA Discussion Papers 6030, Institute for the Study of Labor (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Volker Ziemann, 2015. "Towards more gender equality in Austria," OECD Economics Department Working Papers 1273, OECD Publishing.

    More about this item

    Keywords

    cash and in-kind transfers; child poverty; family policy; income distribution;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:elsaab:135-en. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/eloecfr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.