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  • Title: [Family assistance and the cost of children].
    Author: Lattes G.
    Journal: Econ Stat; 1987 Oct; (203):61-7, 76, 78. PubMed ID: 12268708.
    Abstract:
    A comparison of the increase in net resources for a French family of a given size due to family allowances and tax benefits with the estimated cost of the child or children indicates that the extent of the assistance from 1970-86 varied greatly with the birth order of the child. For an only child, the net increase in resources was only 2-4% on average for the total duration of the child's dependency, while its cost (defined as the added expenditure needed to maintain the standard of living enjoyed by the couple before the child's birth) was estimated at 19%. A higher proportion of the costs of the 2nd and 3rd children is covered, with the amount of assistance increasing as the family income declines. For the past dozen years the 3rd child has benefitted from special measures. Over the total life cycle, the volume of allowances for 3 children can be 2.7 times greater than that for families with 2 children. The 3rd child has also enjoyed special tax advantages since 1980. If the mother continues to be employed, overall income may be increased. The female activity rate, however, undergoes its most marked decline for mothers of 3 children. The parental educational allowance created in 1985 is provided for women who discontinue working on the arrival of the 3rd child. Compensation for loss of salary if the mother qualifies may be equivalent to between 43%-48%. In terms of opportunity cost, the family has a drop of net resources of 20-25% relative to what it would have received if the mother had continued working and had only 2 children. At all income levels the increase in family allowances is more significant when the mother stops working, because the parental education allowance is larger than the allowance for young children. Aid to the 3rd child varies relatively little as a function of family income, from a minimum of 16,110 francs when it is comprised entirely of benefits, reduction of taxes being null, to a maximum of 29,150 francs, 19,390 from reduction of taxes and 9760 from benefits. Costs of the 3rd child are compensated completely by the allowances and tax advantages only for the most impoverished families.
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