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Towards a European union child basic income?: Within and between country effects

  1. Horacio Levy  Is a corresponding author
  2. Manos Matsaganis  Is a corresponding author
  3. Holly Sutherland  Is a corresponding author
  1. OECD, France
  2. Athens University of Economics and Business, Greece
  3. University of Essex, United Kingdom
Research article
Volume 6(1) Spring 2013
Cite this article as: H. Levy, M. Matsaganis, H. Sutherland; 2013; Towards a European union child basic income?: Within and between country effects; International Journal of Microsimulation; 6(1); 63-85. doi: 10.34196/ijm.00077
3 figures and 5 tables

Figures

Figure 1
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Cost and funding implications by country.

Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age …

Figure 2
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Net flows as a percentage of national GDP.

Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age …

Figure 3
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Net average benefit per child by income quartile group in euro per month.

Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age …

Tables

Table 1
Child Basic Incomes: target populations and benefit amounts.
Share of children aged below 6 in the population (2010) (%) PPP-adjusted €50 EU CBI (€ per month per child)
Belgium 6.9 55.70
Bulgaria 5.8 25.40
Czech Republic 6.3 37.60
Denmark 7.1 71.15
Germany 5.0 52.15
Estonia 6.7 37.40
Ireland 9.3 59.55
Greece 6.0 47.55
Spain 6.4 48.50
France 7.4 55.40
Italy 5.7 51.75
Cyprus 6.7 44.55
Latvia 6.0 36.10
Lithuania 5.8 32.55
Luxembourg 6.9 60.25
Hungary 5.8 32.45
Malta 5.8 38.95
Netherlands 6.7 53.80
Austria 5.7 53.10
Poland 6.0 30.95
Portugal 5.9 44.10
Romania 6.1 29.40
Slovenia 5.9 42.30
Slovakia 6.1 35.80
Finland 6.7 61.75
Sweden 7.0 60.80
United Kingdom 7.3 50.10

  1. Notes: “PPP-adjusted €50 EU CBI” is a Child Basic Income scheme that pays €50 per month, adjusted for power purchasing parity, to all children below the age of 6 in the EU.

  2. Sources: Own calculations based on Eurostat (2012) Purchasing power parities, http://epp.eurostat.ec.europa.eu/portal/page/portal/purchasing_power_parities/data/database, Population by age in 2010: http://epp.eurostat.ec.europa.eu/portal/page/portal/population/data/database. Downloaded on 10 Feb 2012 15:45:33 MET.

Table 2
Funding implications at EU level.
EU CBI scheme
50abs 50ppp
gross cost (million euro per year) 18,302 17,928
as % of EU budget 12.98% 12.72%
as % of EU GDP 0.15% 0.15%
national tax levied (million euro per year) 2,740 2,760
as % of gross cost 14.97% 15.39%
EU tax required (million euro per year) 15,393 14,976
flat tax rate 0.204% 0.198%
as % of EU budget 10.92% 10.62%
as % of EU GDP 0.13% 0.12%

  1. Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age of 6 in the EU would be eligible under both schemes.

    Sources: Own calculations based on EUROMOD F5.36.

Table 3
Impact on child poverty in the EU.
EU CBI scheme
50 abs 50ppp
A. poverty line fixed to the baseline at 60% of equivalised median disposable income
Headcount rate
Baseline (without EU CBI) 17.0%
Reform (with EU CBI) 14.6% 14.9%
Difference in percentage points −2.4 −2.2
Proportional reduction (%) Poverty gap 14.2 12.7
Baseline (without EU CBI) 26.5%
Reform (with EU CBI) 24.9% 25.2%
Difference in percentage points −1.6 −1.1
Proportional reduction (%) 6.2 4.3
B. poverty line fixed to the baseline at 40% of equivalised median disposable income
Headcount rate
Baseline (without EU CBI) 5.4%
Reform (with EU CBI) 4.3% 4.5%
Difference in percentage points −1.1 −0.9
Proportional reduction (%) Poverty gap 20.8 16.7
Baseline (without EU CBI) 31.7%
Reform (with EU CBI) 29.3% 29.8%
Difference in percentage points −2.4 −2.1
Proportional reduction (%) 7.7 6.6

  1. Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age of 6 in the EU would be eligible under both schemes. Poverty indices are computed for the population of children under 6 years of age. The EU poverty rate is calculated by adding up the number of such children calculated to be below the national poverty thresholds in each country and dividing by the EU population of children in this age group.

  2. Sources: Own calculations based on EUROMOD F5.36.

Table 4
Impact on child poverty per country (children under 6 years of age).
Baseline poverty rate (%) Poverty rate after the reform (%) Proportional reduction in poverty (%)
50abs 50pps 50abs 50pps
Belgium 12.2 10.0 9.8 −18 −20
Bulgaria 26.1 18.1 21.8 −31 −16
Czech Republic 9.6 7.2 7.6 −25 −21
Denmark 6.9 6.9 6.8 0 −1
Germany 14.2 12.8 12.5 −10 −12
Estonia 13.7 9.9 10.9 −27 −20
Ireland 14.0 13.0 13.0 −7 −7
Greece 20.4 18.1 18.5 −12 −10
Spain 17.0 15.5 15.5 −9 −9
France 16.6 15.4 15.0 −7 −9
Italy 20.2 18.4 18.4 −9 −9
Cyprus 13.1 9.9 9.9 −25 −25
Latvia 21.4 17.0 18.6 −20 −13
Lithuania 15.8 11.6 13.4 −27 −15
Luxembourg 9.4 7.5 7.2 −20 −23
Hungary 18.0 11.4 12.9 −37 −28
Malta 18.3 14.9 15.9 −19 −13
Netherlands 11.7 10.1 9.2 −14 −22
Austria 13.7 11.0 11.0 −20 −20
Poland 18.5 14.3 15.5 −23 −16
Portugal 15.1 11.7 12.9 −23 −15
Romania 26.2 16.9 21.3 −35 −19
Slovenia 11.1 9.4 9.5 −15 −15
Slovakia 13.8 9.6 11.2 −30 −19
Finland 12.4 10.7 10.2 −14 −18
Sweden 12.1 11.9 11.8 −1 −2
United Kingdom 19.7 17.3 17.3 −12 −12

  1. Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age of 6 in the EU would be eligible under both schemes. Poverty rate of children under 6 years of age. The poverty line defined as 60% of national equivalised median disposable income in the baseline.

  2. Sources: Own calculations based on EUROMOD F5.36.

Table 5
Impact on overall poverty per country.
Baseline poverty rate (%) Proportional reduction in overall poverty (%)
50abs 50pps
EU 15.9 −2 −2
Belgium 11.6 −2 −2
Bulgaria 20.0 −4 −2
Czech Republic 7.9 −2 −1
Denmark 10.4 2 3
Germany 14.2 −1 −1
Estonia 15.6 −3 −3
Ireland 13.0 0 0
Greece 20.8 0 0
Spain 18.8 −1 −1
France 13.3 −1 −2
Italy 17.5 −1 −1
Cyprus 14.6 −3 −3
Latvia 20.1 −1 −1
Lithuania 17.8 −1 0
Luxembourg 8.2 −3 −3
Hungary 11.3 −8 −7
Malta 16.1 −2 −1
Netherlands 10.2 −2 −3
Austria 11.8 −3 −2
Poland 17.5 −2 −1
Portugal 19.1 −3 −2
Romania 23.1 −5 −3
Slovenia 13.7 −2 −2
Slovakia 9.4 −5 −4
Finland 11.9 −2 −2
Sweden 12.4 1 1
United Kingdom 16.3 −2 −2

  1. Notes: ‘50abs’ is a Child Basic Income scheme that pays €50 per month. ‘50ppp’ is a Child Basic Income scheme that pays €50 per month adjusted for power purchasing parity. All children below the age of 6 in the EU would be eligible under both schemes. Poverty rate of total population. The poverty line defined as 60% of national equivalised median disposable income in the baseline.

  2. Sources: Own calculations based on EUROMOD F5.36.

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