Universalism under siege? Exploring the association between targeting, child benefits and child poverty across 26 countries

Abstract

The long-standing wisdom that universally designed benefits outperform targeted benefits in terms of poverty reduction has come under siege. Recent empirical studies tend to find that targeting is not necessarily associated anymore with lower levels of poverty reduction. In this study, we investigate for a broad set of European countries (1) the relationship between child benefits and child poverty reduction; (2) whether a universal or targeted approach is more effective in reducing child poverty; and (3) the causal mechanisms explaining the link between (1) and (2). In doing so, we take into account the general characteristics of the child benefit system, the size of the redistributive budget and the generosity of benefit levels. In contrast to previous studies, we construct an indicator of targeting that captures the design instead of the outcomes of child benefit systems. We find that targeting towards lower incomes is associated with higher levels of child poverty reduction, conditional on the direction of targeting and the characteristics of the benefit system.

The triple bind of single-parent families

“…This approach is also suggested in recent work by Van Lancker and Van Mechelen (2015) and Van Mechelen and Bradshaw (2013). The findings of this chapter offer additional support for such an approach.…”

“…Van Lancker and Van Mechelen (2015) explored the association between targeting of child benefits and child poverty, and found that targeting low-income families resulted in higher levels of poverty reduction. The authors conclude that targeting has a better effect under certain circumstances: when targeting is directed towards lowincome families and when the benefits are generous.…”

“…To assess the impact of universal and targeted family benefits on the alleviation of poverty in working and nonworking families, we compare the situation prior to and after the receipt of family benefits while holding the poverty line constant (Caminada & Goudswaard, 2009;Sainsbury & Morissens, 2002;Van Lancker & Van Mechelen, 2015;. The relative poverty reduction effectiveness score (PRES) is an oftenused standard measure in poverty research (Caminada & Goudswaard, 2009) and is calculated using the following formula:…”

The educational gradient of childlessness and cohort parity progression in 14 low fertility countries

“…However in the UK (tax) benefits for families with children are relatively high and targeted towards lower incomes (Van Lancker and Van Mechelen 2014). Anglo-Saxon countries -especially the UK -display higher inequality in earnings and higher poverty (Korpi 2000).…”

Horizontal and Vertical Equity Objectives of Child Benefit Systems: An Empirical Assessment for European Countries

“…1 A large body of research has demonstrated that child benefits are of paramount importance in reducing child poverty (Van Lancker and Van Mechelen 2015;Salanauskaite and Verbist 2013;Bradshaw 2012;Kamerman et al 2003;Immervoll et al 2001). This means that child benefit systems have an important redistributive impact, commonly referred to as a vertical equity objective.…”