The impact of "Family 500+" programme on household incomes, poverty and inequality

We use the microsim­u­la­tion approach and house­hold bud­get sur­vey data from 2015 to esti­mate the short­term impact of the “Fam­ily 500+” pro­gramme on house­hold incomes, poverty and inequal­ity. The results sug­gest that the pro­gramme will have the strongest impact on the incomes of house­holds at the lower end of income dis­tri­b­u­tion. Extreme con­sump­tion poverty in the whole pop­u­la­tion is reduced in the range from 35 to 37%, while child poverty in the range from 75 to 100%, depend­ing on the choice of equiv­a­lence scale and assump­tions about changes in house­hold expen­di­tures. The paper shows also that the pro­gramme will reduce the Gini index of income inequal­ity in Poland by a few per­cent­age points. The pro­gramme can lead to a lower risk of extreme poverty for house­holds with chil­dren as com­pared to small house­holds (e.g. single-person house­holds). Analy­sis based on cer­tain equiv­a­lence scales sug­gests that even before the imple­men­ta­tion of the “Fam­ily 500+” pro­gramme extreme poverty among house­holds with chil­dren was com­pa­ra­ble or lower than among one-person or child­less house­holds. The pro­gres­sive impact of “Fam­ily 500+” pro­gramme on income dis­tri­b­u­tion in Poland may be reduced in the longer run if labour mar­ket activ­ity of low income house­holds will be affected negatively.