The Redistributive Role of Child Benefits Revisited

In this paper we reexamine the commonly invoked argument that due to the existence of a negative correlation between earning ability and family size, the latter can be used as a `tagging` device, justifying subsidizing children (via provision of child allowances) to enhance egalitarian objectives.
 

Employing a benchmark setting where the quality-quantity paradigm holds, we show that the case for subsidizing children is far from being a forgone conclusion.
 

We demonstrate that the desirability of subsidizing children crucially hinges on whether benefits are means-tested or being accorded on a universal basis.

     
Jel Nos.: D6, H2, H5

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