Spending effects of child-related fiscal transfers

Olga Goldfayn-Frank, Vivien Lewis and Nils Wehrhöfer

No 26/2022, Discussion Papers from Deutsche Bundesbank

Abstract: As part of Germany's fiscal response to the Covid-19 pandemic, parents received three payments totalling e450 per child. Randomization in the payment dates and daily scanner data allow us to identify the effects of these transfers on household spending. We find a significant but small spending effect of the first transfer, with an estimated marginal propensity to consume of about 12%. The effect is higher for low-income and liquidity-constrained households, and in areas with lower infection rates. The second and third payment failed to increase spending. Our results indicate that the child bonus was redistributive rather than stimulative.

Keywords: child bonus; Covid-19; fiscal stimulus; household spending; marginal propensity to consume; pandemic; transfer (search for similar items in EconPapers)
JEL-codes: D12 E21 E62 H24 H31 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:262022

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