Basic income scheme for children in Europe

A Europe-wide universal child benefit programme could reduce child poverty and the poverty gap throughout Europe, according to a briefing paper produced by UNICEF, the United Nations agency for children. Moreover, it says, significant reductions in child poverty could be achieved without disproportionate cost.

Key points

  • If the poverty threshold were set at 60 per cent of the median income, a Europe-wide basic income scheme for children (not adjusted for price differences) would reduce the number of children in poverty by 14.2 per cent and the poverty gap by 6.2 per cent. The reduction in headcount child poverty would be greatest in Hungary (37 per cent), and would exceed 25 per cent in Romania, Bulgaria, Slovakia, Estonia, Lithuania and the Czech Republic. In contrast, it would be negligible in Sweden and Denmark. The UK would be a beneficiary.
  • After adjusting for price differences between countries, the number of children in poverty would be reduced somewhat less: headcount poverty would fall by 12.7 per cent and the poverty gap by 4.3 per cent. But the poverty reduction would be significant in western Europe countries as well as those in the east.
  • Fixing the poverty threshold lower, at 40 per cent of median income, would lead to a higher proportion of a smaller group of children being taken out of poverty.
  • A scheme paying €50 per month per child would cost around €18 billion. This is approximately 0.15 per cent of the combined GDP of all EU member states, and could be funded by a flat tax on all incomes, set at a common rate of about 0.2 per cent.

The authors conclude: 'Those European statesmen and women willing to embark on the long trek towards (re)building a shared European identity cannot hope to find a better starting point than a scheme supporting the incomes of families with young children wherever in the EU they might reside'.

Source: Horacio Levy, Manos Matsaganis and Holly Sutherland, Simulating the Costs and Benefits of a Europe-Wide Basic Income Scheme for Children, UNICEF
LinksBriefing

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Publication date: 
Jan 21 2014