INCOME MICROSIMULATION FOR ESTIMATING THE POVERTY REDUCTION EFFECTS OF CASH TRANSFERS FOR FAMILIES WITH CHILDREN

We apply income microsimulation techniques on nationally representative household survey data in order to estimate the ex-post effects on poverty reduction of recent changes regarding cash support policy for families with children in Romania. We focus on cash benefits directly related to the presence of children and we attempt to isolate the effects of policy changes from other broader socio-economic developments on poverty reduction. We build a counterfactual scenario based on income indexation to answer the question of what would have happened if the policies had not been changed. We find that recent changes have improved the poverty reduction power of family benefits, overall, but especially among children and families with numerous children.