The Concentration of Children on Income Distribution and Its Consequences for Poverty and Inequality

The Concentration of Children on Income Distribution and Its Consequences for Poverty and Inequality

Part of the International Social and Public Policy Seminar Series
Hosted by the Department of Social Policy on 17 October 2024

Presenter: Professor Berkay Ozcan (LSE)
Chair: Dr Robtel Neajai Pailey (Department of Social Policy LSE)

Abstract: This presentation is based on a seldom-discussed phenomenon in Organisation for Economic Co-operation and Development (OECD) countries: a secular increase in the concentration of households with children at the upper parts of the (market) income distribution. Drawing upon cross-national microdata encompassing around 25 countries from the Luxembourg Income Studies, our analysis spans the past three decades, revealing a significant surge in children's concentration in such households across most advanced economies, albeit with notable differences in trends and levels. We shed light on the implications of these findings on the estimates of household income inequality and child poverty across countries. We discuss the resulting growing significance of equivalence scale adjustments as tools commonly used to adjust for "cost of children" or "household size". More importantly, we discuss some of the factors underlying this concentration and its broader implications for redistribution and family benefits.