A Theory of Child Targeting

Olivier Bargain and Olivier Donni

No 2669, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: intrahousehold distribution; targeting; social welfare; paternalism; child benefit; commodity taxation; labeling (search for similar items in EconPapers)
JEL-codes: D13 D31 D63 H21 H31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007-03
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published as 'Targeting and Child Poverty' in: Social Choice and Welfare, 2012, 39(4), 783-808

Downloads: (external link)
https://docs.iza.org/dp2669.pdf (application/pdf)

Related works:
Working Paper: A Theory of Child Targeting (2007)
Working Paper: A theory of child targeting (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2669

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().