Reinvesting in Children?

Economic collapse in the former Communist bloc led to soaring levels of child poverty in the 1990s. The effects of rising unemployment, underemployment and wage arrears were exacerbated by the erosion of state support for families with children as governments responded to a collapse in revenue. Since 1998, even the poorer countries of the bloc - those in South Eastern Europe and the CIS - have seen a return to economic growth. But have the benefits of growth been felt by children? Are child support policies being restored or restructured as economic conditions improve, and to what effect? This paper examines three aspects of government support for the youngest children – maternity leave policy, child and family allowances and pre-school/nursery provision. For each aspect, it explores formal provision before using microdata to analyse the allocation of each service across the population in four countries: Bulgaria, Albania, Moldova and Tajikistan. Is provision now skewed towards poorer households (e.g. because of effective means-testing)? Or towards richer households (e.g. because of charging policies for pre-school)? For the case of child allowances in particular, it also uses the microdata to examine whether and where the allowances are large enough to lift children out of poverty. The aim of the analysis is to assess the adequacy of child support services in the countries under investigation, and to seek lessons from more successful countries in the region for others where child support is not reducing child poverty. The paper concludes that most countries in the region are spending insufficient resources on policies for very young children, and that while in some countries family allowances are targeted towards poorer households with some degree of success, pre-school overwhelmingly benefits urban families and the better off, while paid maternity leave is in practice increasingly rare, despite generous formal provision. The paper calls for governments and donors to pay greater attention to the needs of very young children. It calls for a substantial increase in public spending on each of these policy areas, and it further recommends that governments (a) introduce proxy means tests to improve the targeting of family allowances; (b) make maternity benefit available on a social assistance as well as a social insurance basis; and (c) make a commitment to ensuring that all 3-5 year olds have free access to some early years education each week, albeit on a part-time basis.