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Effects of Different Child Support Policies on Labour Supply and Poverty: A Simulation Study

Bibliographic Data

ID22187444
AuthorsKerstin Bruckmeier (0000-0002-4797-7543), Diego d’Andria (0000-0002-1915-4128), Jürgen Wiemers (0000-0002-3863-7168)
Year2022
Volume142
Issue2
Pages159-206
Publication date2022-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Contextual Economics – Schmollers Jahrbuch (JOURNAL)
Journal identifiersISSN: 2568-7603 • E-ISSN: 2568-762X
PublisherDuncker & Humblot GmbH (PUBLISHER • DE)
DOI10.3790/schm.2024.372970
OpenAlexW4405248815
LanguageEN
References cited28

We study a set of hypothetical reforms of child benefits in Germany using a static tax-benefit microsimulation model augmented with endogenous labour supply and take-up choices. We distinguish between a reform of the universal non-means-tested child benefit, a reform of the means-tested child benefit under the minimum income scheme, and a combination of both. The model simulates the impacts of the reforms on household income, poverty and labour supply. We find that improvements in the means-tested child benefit are well-targeted: They provide a high level of poverty reduction with a low fiscal impact at the cost of reduced labour supply incentives for low-income families. When unconditional benefits are increased, the effect on overall income inequality is more pronounced at the cost of reduced labour supply incentives for middle- and high-income families. Finally, when combined, the two approaches show synergies, particularly in the form of improved poverty reduction

Child poverty · Economic growth · Economics · Incentive · Inequality · Labour economics · Labour supply · Microeconomics · Microsimulation · Poverty · Poverty reduction · demographic modeling and climate adaptation · Financial Literacy, Pension, Retirement Analysis · Gender, Labor, and Family Dynamics

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