Reforming Family Transfers in Southern Europe: Is there a Role for Universal Child Benefits?

The drive to reduce child poverty is of particular interest in southern Europe, where public assistance to low-income families with children is often meagre or not available at all. The paper examines the effect of income transfers to families in Greece, Italy, Spain and Portugal using a benefit-tax model. The distributional impact of actual programmes is shown to be weak, hence the scope for reform great. As an illustration, the European benefit-tax model EUROMOD is used to simulate universal child benefits equivalent to those in Britain, Denmark and Sweden. The anti-poverty effect of such benefits is found to be in proportion to their fiscal cost.