Money or Kindergarten? Distributive Effects of Cash Versus In-Kind Family Transfers for Young Children

Michael Förster and Gerlinde Verbist
Additional contact information
Gerlinde Verbist: University of Antwerp

No 135, OECD Social, Employment and Migration Working Papers from OECD Publishing

Abstract: Public support to families with pre-school children can be in the form of cash benefits (e.g. child allowances) or of “in-kind” support (e.g. care services such as kindergartens). The mix of these support measures varies greatly across OECD countries, from a cash / in-kind composition of 10%/90% to 80%/20%. This paper imputes the value of services into an “extended” household income and compares the resulting distributive patterns and the redistributive effect of these two strands of family policies. On average, cash and in-kind transfers each constitute 7 – 8% of the incomes of families with young children. Both instruments are redistributive. Cash transfers reduce child poverty by one third, with the estimated impacts in Austria, Ireland, Sweden, Hungary and Finland performing above average. When services are accounted for, child poverty falls by one quarter and poverty among children enrolled in childcare is more than halved. This reduction is highest in Belgium, France, Hungary, Iceland and Sweden. L’aide publique aux familles ayant des enfants en âge préscolaire peut prendre la forme de prestations monétaires (allocations familiales, par exemple) ou en «nature» (par exemple les services de garde tels que les jardins d'enfants). La combinaison de ces mesures de soutien varie considérablement selon les pays de l'OCDE, d’une composition monétaire / ou en « nature » allant de 10%/90% à 80%/20%. Ce document attribue la valeur des services à un revenu « élargi » des ménages et compare les facteurs distributifs résultant et l’effet redistributif de ces deux volets de la politique familiale. En moyenne, les transferts monétaires et en nature constituent chacun 7- 8% des revenus des familles ayant des enfants en bas âge. Les deux instruments sont redistributifs. Les transferts monétaires réduisent la pauvreté infantile d'un tiers, et les effets estimés sont en-dessus de la moyenne en Autriche, Irlande, Suède, Hongrie et en Finlande. Lorsque les services sont pris en compte, la pauvreté infantile chute d'un quart et la pauvreté chez les enfants inscrits dans les services de garde est divisée par deux. Cette réduction est la plus élevée en Belgique, en France, en Hongrie, en Islande et en Suède.

Keywords: cash and in-kind transfers; child poverty; family policy; income distribution (search for similar items in EconPapers)
JEL-codes: D31 H40 I38 J13 (search for similar items in EconPapers)
Date: 2012-09-11
New Economics Papers: this item is included in nep-dem
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1787/5k92vxbgpmnt-en (text/html)

Related works:
Working Paper: Money or kindergarten? Distributive effects of cash versus in-kind family transfers for young children (2013)
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:oec:elsaab:135-en

Access Statistics for this paper

More papers in OECD Social, Employment and Migration Working Papers from OECD Publishing Contact information at EDIRC.
Bibliographic data for series maintained by ().