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A Theory of Child Targeting


  • Olivier Bargain

    (School of Economics, Univeristy College Dublin, CHILD & IZA Bonn)

  • Olivier Donni

    (University de Cergy-Pontoise, THEMA, CIRPEE & IZA Bonn)


There is a large empirical literature on policy measures targeted at children but surprisingly very little theoretical foundation to ground the debate on the optimality of the different instruments. In the present paper, we examine the merit of targeting children through two general policies, namely selective commodity taxation and cash transfer to family with children. We consider a household that comprises an adult and a child. The household behavior is described by the maximization of the adult’s utility function, which depends on the child’s welfare, subject to a budget constraint. The relative effects of a price subsidy and of a cash benefit on child welfare are then derived. In particular, it is shown that ‘favorable’ distortions from the price subsidies may allow to redistribute toward the child. The framework is extended to account for possible paternalistic preferences of the State. Finally, it is shown that, in contrast to the traditional view, well-chosen subsidies can be more cost effective than cash transfers in alleviating child poverty.

Suggested Citation

  • Olivier Bargain & Olivier Donni, 2007. "A Theory of Child Targeting," Working Papers 200710, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:200710

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    References listed on IDEAS

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    Cited by:

    1. Martina Menon & Federico Perali & Marcella Veronesi, 2014. "Recovering Individual Preferences for Non-Market Goods: A Collective Travel-Cost Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(2), pages 438-457.

    More about this item


    commodity taxation; child benefit; targeting; intrahousehold distribution; social welfare; paternalism; labeling;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household


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