Compensation for households with children in Croatia, Slovenia and Austria
15 Apr 2018
We study a set of child-related tax-benefit policies, which provide compensation for households with children (CHC), in Croatia, Slovenia and Austria using EUROMOD. The policies include child and large family cash benefits, personal income tax reliefs for dependent children, subsistence and housing benefits. Compensation indices, based on Verbist and Van Lancker (2016), are used to measure the extent to which CHC policies cover the needs of children. The values and patterns of compensation indices are analysed across income groups to compare the generosity and equity of CHC in the three countries. We also assess poverty reduction effects and show the contributions of various CHC policies. Our findings demonstrate that the Croatian system provides the lowest average CHC, particularly for households with one and two children. Furthermore, the uneven distribution of CHC raises equity concerns. The results and methods of the research can be used for policy design evaluation.