Die geplante Kindergrundsicherung: ein sinnvoller Ansatz?

German policy-makers currently discuss the introduction of a basic income for children (“Kindergrundsicherung”). While many details are still unclear, two main goals are pursued with this instrument: a simplification and unification of a number of different current transfers addressed at children, and an increase in the level of financial support. In this contribution, it is argued that simplification is a reasonable goal, but an increase in transfers is unlikely to yield significant positive economic effects. In particular, a large negative effect on labor market participation of parents is likely, with adverse effects on Germany’s potential output growth. Reasonable goals such as increasing social mobility would be better pursued with investments into the education system, rather than higher transfers. Finally, the fiscal scope of the federal budget will also be limited in the medium term, and therefore any proposal for an expensive expansion of the welfare state should be met with great caution at this time.