Introduction

Throughout the 20th century welfare state programmes have tried to alleviate poverty and provide support to families with children. In some countries these programmes have proved to be very successful, while in other countries welfare state programmes were deemed to be aggravating poverty. Part 1 of this volume analyses the impact and trends of tax and transfer programmes for children and families in the 1990s and takes a closer look at the effects of recent policy reforms on children’s wellbeing. In the first chapter Howard Oxley, Thai-Thanh Dang, Michael F. Förster and Michele Pellizzari try to establish the role played by structural changes in household/employment relations and the direct impact of public policy via tax and transfer programmes on child poverty trends in industrialised nations.

Their results reveal no generalised trend in child poverty: some countries recorded significant increases while others – including high poverty countries – included decreases. In the majority of countries, child poverty remained stable throughout the past ten years. Changes in poverty rates were little affected by the shifts in the household structure defined by family type and work status. Thus, where poverty has increased it originated within individual household types (pure poverty effect). Nonworking households, which largely depend on transfer income, reveal divergent trends in income transfer policies across countries. Oxley, Dang, Förster and Pellizzari find a widespread increase in poverty before taxes and transfers (for a subset of these countries). This increase was generally more than compensated by increased effectiveness of the tax and transfer system. Thus, income transfer and tax policies appeared to be more effective in reducing poverty at the end of the period than at the beginning. Over this period there may have been some switching from transfers to taxrelated benefits for children.

As regards policies, Oxley et al note that poverty is highest among non-working households in all countries, suggesting that employment is a key channel for reducing poverty. However, as large shares of children are living in households with at least one worker, the problems of the working poor also need to be considered. In this context, the authors note that increased spending on children is likely to have a major impact on overall poverty since 60% of poor households are households with children.