GINI DP 25: Is the “Neighbour’s” Lawn Greener? Comparing Family Support in Lithuania and Four Other NMS

To what extent can a country’s effectiveness in reducing child poverty be attributed to the size of family cash transfers (i.e. both benefits and tax instruments) or to their design? In this paper, we aim at disentangling the importance of each of these two factors, focusing on the family support system in Lithuania and comparing it with four other new member states. Despite increased susceptibility to poverty in Lithuania, single parent families have less state support than large families. This contrasts with other former communist countries, such as Estonia, Hungary, Slovenia or the Czech Republic, who protect both large and single parent families much better. The question is whether their family transfer systems would achieve similar results in Lithuania. We employ the EUROMOD microsimulation tax-benefit model to swap family policies across countries and test whether size or design have greater effects on child poverty reduction in Lithuania.