The Distributional Impact of Social Spending on In-Kind and Cash Child Transfers in Croatia

Pezer Martina (), Mustać Nora () and Chrysa Leventi
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Pezer Martina: Research Associate Institute of Public Finance Smičiklasova 21 10000 Zagreb, Croatia
Mustać Nora: PhD Postdoctoral researcher Institute of Public Finance, Croatia

South East European Journal of Economics and Business, 2023, vol. 18, issue 1, 161-175

Abstract: Social spending in Croatia is mainly based on social protection, public healthcare and education policies. There are two forms of investing in children through the social spending provided by central and local governments: cash and in-kind transfers. This paper describes the impacts of such social spending on households with children in Croatia and its capital, Zagreb. Making use of a microsimulation model, the income distribution of cash and in-kind transfers and their impacts on poverty and inequality are assessed. Compared to cash transfers, in-kind transfers, including local government subsidies, are relatively evenly distributed, income independent, and thus roughly equally important for the entire population. Their value greatly exceeds that of monetary transfers. Results demonstrate the progressive effect of transfers in kind on income distribution by reducing income inequality and poverty. This research seeks to emphasise the importance of using augmented income in the analysis of income inequality and poverty, instead of solely monetary disposable income.

Keywords: income distribution; in-kind transfers; microsimulation; child poverty; income inequality (search for similar items in EconPapers)
JEL-codes: D31 H51 H52 I30 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:seejeb:v:18:y:2023:i:1:p:161-175:n:10

DOI: 10.2478/jeb-2023-0011

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