Is the “neighbour’s” lawn greener? Comparing family support in Lithuania and four other NMS

Gerlinde Verbist and Lina Salanauskaite

No EM4/11, EUROMOD Working Papers from EUROMOD at the Institute for Social and Economic Research

Abstract: To what extent can a country’s effectiveness in reducing child poverty be attributed to the size of family cash transfers (i.e. both benefits and tax advantages) or to their design? In this paper, we disentangle the importance of each of these two factors, focusing on the family support system in Lithuania and comparing it with four other new member states. Both single and large families have increased susceptibility to poverty in Lithuania. This contrasts with other former communist countries, namely Estonia, Hungary, Slovenia and the Czech Republic which protect these family types much better. This paper examines whether their family transfer systems would achieve similar results in Lithuania. We employ the EUROMOD microsimulation tax-benefit model to swap family policies across countries and to test whether size or design has greater effects on child poverty reduction in Lithuania. Our results point to considerably improving poverty situation among large families under Hungarian, Slovenian and the Czech policies. Single parent families would only gain if Lithuanian spending on family transfers would increase by a large degree. Estonian policies would lead to very mixed results: small gains for large families and losses for single parent families

Date: 2011-12-19
New Economics Papers: this item is included in nep-tra
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