This chapter traces the development of spending on family allowances in Italy and the Netherlands from the end of the Second World War through the early 1990s. Family allowance spending grew dramatically in the Netherlands during the postwar period, contributing to its youth-oriented social policy regime, while in Italy the opposite occurred. A focus of this chapter is the strategic behavior of politicians working within political parties, behavior that interacts with the structure of family allowance programs in Italy and the Netherlands to determine spending outcomes. The way that family allowance programs are structured – along universalist lines in the Netherlands and occupationally based in Italy – is in turn an outgrowth of the competitive strategies of politicians. At the same time, the structure of family allowance programs sets the parameters for future growth of benefits by altering both politicians' and potential constituencies' perceptions of the benefits to be gained by either increasing benefit levels across the board or extending family allowances to new constituencies in a piecemeal fashion.

Family allowances are an important indicator of the age orientation of social policies because they are usually the largest public expenditure item for families with children, even in countries where the state provides things such as day care and other services for families (Gauthier 1996). Other kinds of benefits for families (day care, parental leave, health care, educational subsidies) could in principle siphon resources away from family allowances.