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Social Indicators Research

, Volume 128, Issue 3, pp 1299–1318 | Cite as

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

  • Gerlinde Verbist
  • Wim Van Lancker
Article

Abstract

A large body of research has demonstrated that child benefit systems are of paramount importance in reducing child poverty, thus having an important vertical equity component. Although all child benefit systems embody in one way or the other such vertical equity objective, the primary objective of child benefit systems is to (at least partly) compensate for the costs associated with childrearing and to minimize the welfare loss relative to childless families, a horizontal equity objective. Most studies are concerned with vertical equity and child poverty reduction; here we also explicitly take the dimension of horizontal equity into account. In this paper, we propose and develop a two-dimensional framework for evaluating and classifying the outcomes of child benefit systems in terms of both vertical and horizontal equity. Treating these two objectives as analytically distinct permits the construction of a synthetic index of child benefit outcomes and allows for the explicit incorporation of a value judgement about the most important objective of child benefit systems. In doing so, we propose a novel measure for gauging horizontal equity based on the cost of children implicit in commonly used equivalence scales drawing on the public finance literature. We demonstrate the potential of our evaluative framework for policy purposes by means of an empirical application for 31 European welfare states. We contribute to the literature by highlighting the role of characteristics of benefit systems in achieving certain objectives regarding horizontal and/or vertical equity.

Keywords

Child benefit systems Horizontal equity Vertical equity Cost of children Child poverty 

Notes

Acknowledgments

The authors would like to thank Dieter Vandelannoote, Tine Hufkens, and the participants in the FISS 21th Research Seminar (Sigtuna) and the 4th General Conference of the International Microsimulation Association (Canberra) for comments and suggestions. Wim Van Lancker acknowledges financial support from the Research Foundation-Flanders (FWO Vlaanderen).

Supplementary material

11205_2015_1080_MOESM1_ESM.xlsx (25 kb)
Supplementary material 1 (xlsx 24 kb)

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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.Herman Deleeck Centre for Social PolicyUniversity of AntwerpAntwerpBelgium

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