Child Benefits as a Tool for Reducing Child Poverty in Russia: Microsimulation Analysis

Abstract

The work employs a microsimulation approach to assess the impact of child benefits on the poverty level among children in Russia. The empirical basis of the study is data from a nationally representative Sample Survey of Household Income and Participation in Social Programmes conducted by Rosstat. The analysis reveals that between 2014 and 2021, child benefits did reduce the poverty level among children, but their impact was quite limited. In exploring possible directions for developing of the child benefit system, the study conducts a scenario analysis, evaluating the effect of universal, categorical, means-tested, and mixed-scheme benefits on child poverty levels. For each scenario, the effectiveness of the benefits is assessed in relation to their cost. The results suggest that, given a limited budget, the most promising approach may be a mixed-scheme benefit, with universal payments for younger children and means-tested payments for older children.