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The Distributional Impact of Social Spending on In-Kind and Cash Child Transfers in Croatia

Author

Listed:
  • Pezer Martina

    (Research Associate Institute of Public Finance Smičiklasova 21 10000 Zagreb, Croatia)

  • Mustać Nora

    (PhD Postdoctoral researcher Institute of Public Finance, Croatia)

  • Leventi Chrysa

    (PhD European Commission, Joint Research Centre Spain)

Abstract

Social spending in Croatia is mainly based on social protection, public healthcare and education policies. There are two forms of investing in children through the social spending provided by central and local governments: cash and in-kind transfers. This paper describes the impacts of such social spending on households with children in Croatia and its capital, Zagreb. Making use of a microsimulation model, the income distribution of cash and in-kind transfers and their impacts on poverty and inequality are assessed. Compared to cash transfers, in-kind transfers, including local government subsidies, are relatively evenly distributed, income independent, and thus roughly equally important for the entire population. Their value greatly exceeds that of monetary transfers. Results demonstrate the progressive effect of transfers in kind on income distribution by reducing income inequality and poverty. This research seeks to emphasise the importance of using augmented income in the analysis of income inequality and poverty, instead of solely monetary disposable income.

Suggested Citation

  • Pezer Martina & Mustać Nora & Leventi Chrysa, 2023. "The Distributional Impact of Social Spending on In-Kind and Cash Child Transfers in Croatia," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 161-175, June.
    • Handle: RePEc:vrs:seejeb:v:18:y:2023:i:1:p:161-175:n:10
    DOI: 10.2478/jeb-2023-0011
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    References listed on IDEAS

    as
    1. Miles Corak & Christine Lietz & Holly Sutherland, 2005. "The Impact of Tax and Transfer Systems on Children in the European Union," Papers inwopa05/30, Innocenti Working Papers.
    2. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Efendic Adnan, 2023. "Editorial," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 1-1, June.

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    More about this item

    Keywords

    income distribution; in-kind transfers; microsimulation; child poverty; income inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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