Child welfare and intra-household inequality in Albania

The present paper aims at contributing to the literature on children welfare evaluation by taking into account for intra-household distribution of resources and, as a consequence, intra-household inequality. This task cannot be accomplished within the standard framework of unitary model of consumption, and equivalence scales helps only partially, since their scope is different. To investigate what happens within the family's black box we refer to collective models, recovering information about the decision of how resources are distributed within the household. We use the estimated sharing rule to draw some conclusions about the role played by intra-household inequality for children welfare in Albania and look at the effects that different public policies can have on child welfare. We find that taking into account for intra-household inequality raises the Gini of children welfare by nearly 10 percentage points and that in-kind transfers are more effective than cash transfers in ameliorating children well-being.