For a growing number of children in families headed by single mothers and in those headed by two adults with limited job skills, economic security now depends on the mothers’ earnings. The anti-poverty effect of income transfers is well analysed in the literature. Much less investigated, however, is the role played by policies that support mothers’ employment in shaping the economic well being of families with children. Yet, both dimensions of social policies seem crucial in the explanation of cross-national variations in family poverty rates. How do countries differ in the way they combine income maintenance with employment support? What is the impact of different combinations on child poverty? In this study I will explore these questions by comparing three countries with different social policy approaches: Italy, the United Kingdom and Sweden. Data from the Luxembourg Income Study (LIS) are used to show the anti-poverty effect of transfers and the link between child poverty and mothers’ employment. Since the LIS data for Italy do not provide information on taxes and other public transfers, I have integrated them with a recent microsimulation model of Italian personal income taxes, social security contributions and family allowances. I thereby intend to obtain a meaningful evaluation of the effectiveness of the income transfer system. What appears from my analysis is that mothers’ employment is a very important insurance against poverty, and is particularly important in cases of divorce. In Sweden nearly all mothers work, irrespective of their marital status or children’s age. This is mainly due to a nationwide system of public child care and paid parental leave. Together with generous and universal transfers (in primis, child allowances and advance maintenance payments) families with children face a very low risk of poverty. Where one of the two dimensions is lacking, poverty is higher. In the UK, various social security benefits are available to families with children. However, such benefits are mainly means-tested and, combined with inconsistent child care subsidies, can create poverty traps. In Italy the poor provision of child care services for those under the age of three is often compensated by the family. Yet, income support programmes, which are few and mostly linked to employment status, are ineffective in reducing poverty.
Income Transfers and Support for Mothers’ Employment: The Link to Family Poverty Risks. A Comparison between Italy, Sweden, and the U.K
SOLERA, Cristina
1998-01-01
Abstract
For a growing number of children in families headed by single mothers and in those headed by two adults with limited job skills, economic security now depends on the mothers’ earnings. The anti-poverty effect of income transfers is well analysed in the literature. Much less investigated, however, is the role played by policies that support mothers’ employment in shaping the economic well being of families with children. Yet, both dimensions of social policies seem crucial in the explanation of cross-national variations in family poverty rates. How do countries differ in the way they combine income maintenance with employment support? What is the impact of different combinations on child poverty? In this study I will explore these questions by comparing three countries with different social policy approaches: Italy, the United Kingdom and Sweden. Data from the Luxembourg Income Study (LIS) are used to show the anti-poverty effect of transfers and the link between child poverty and mothers’ employment. Since the LIS data for Italy do not provide information on taxes and other public transfers, I have integrated them with a recent microsimulation model of Italian personal income taxes, social security contributions and family allowances. I thereby intend to obtain a meaningful evaluation of the effectiveness of the income transfer system. What appears from my analysis is that mothers’ employment is a very important insurance against poverty, and is particularly important in cases of divorce. In Sweden nearly all mothers work, irrespective of their marital status or children’s age. This is mainly due to a nationwide system of public child care and paid parental leave. Together with generous and universal transfers (in primis, child allowances and advance maintenance payments) families with children face a very low risk of poverty. Where one of the two dimensions is lacking, poverty is higher. In the UK, various social security benefits are available to families with children. However, such benefits are mainly means-tested and, combined with inconsistent child care subsidies, can create poverty traps. In Italy the poor provision of child care services for those under the age of three is often compensated by the family. Yet, income support programmes, which are few and mostly linked to employment status, are ineffective in reducing poverty.
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