The local effects of income support to families with children in Italy and Greece

Abstract The paper showcases a new spatial microsimulation model, used here to assess the anti-poverty effects of child benefits in Italy ( Assegno Unico Universale ) and Greece ( Επίδομα παιδιού ) at local level. We assess such effects by comparing the actual income distribution, observed under the current policy regime of income support to families with children, with the counterfactual one, that would have prevailed had the previous system been allowed to continue. We compare the values of the total child poverty gap (an indicator that combines the poverty rate and the poverty gap) under the new and the old policy regimes in 107 provinces in Italy and 74 local administrative units in Greece, equivalent to the NUTS-3 level. Our results reveal considerable heterogeneity at local level and identify areas in which the total child poverty gap appears to have increased, as losers from the reform outnumbered winners at the bottom of the income distribution. The paper informs the debate on the optimal design of income support to families with children and illustrates the potential of spatial microsimulation as a tool for the analysis of the local effects of public policies.