A new universal child allowance in Italy: equity and efficiency concerns

Nicola Curci () and Marco Savegnago

No 636, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The paper discusses a possible scheme for a new universal child allowance (assegno unico e universale per i figli, AUU) and evaluates its effects on income distribution (equity) and on financial disincentives to work (efficiency). The analysis, carried out using the Banca d'Italia tax-benefit microsimulation model BIMic, takes into account the principles defined in the enabling law recently approved by the Parliament and the budgetary resources set aside for this measure. The scheme envisaged in the paper differs from the proposals discussed so far in public debate about the AUU due to a significant innovation, namely the introduction of an in-work benefit component. The simulated reform would not only reduce the inequality of disposable income with respect to the current legislation scenario, but also – due to the above mentioned in-work benefit – would lessen the financial disincentives to labor market participation for potential female workers. The latter result is particularly strong for low-income households.

Keywords: family policies; redistribution; equity; efficiency; microsimulation (search for similar items in EconPapers)
JEL-codes: D31 H2 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-cmp, nep-eur and nep-isf
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_636_21

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