discusses the new French policy to modulate family benefits on the basis of income
Olivier Thévenon co-directs INED’s economic demography research team. His research focuses in particular on family policy in OECD countries and the issue of reconciling family and working life. Here he analyses new family policy measures recently announced by the French government, specifically, the proposal to modulate family allowances by income.
(Interview done in October 2014)
The proposal to modulate family allowances on an income basis has finally been approved for inclusion in the government bill on 2015 budget provisions for France’s Sécurité Sociale (health and welfare) system. Does this seem a good solution to you?
The plan to modulate family allowances by income offers the advantage of not reducing the support households now receive to help pay their childcare expenses. The original plan to cut those benefits seemed set to have far-reaching effects: it would have impacted families with only one child, whereas by definition family benefits in France are for families with at least two children.
Moreover, that initially proposed cut in childcare subsidies, added to the reduction of parental leave time and our current uncertainty about the future development of childcare services, threatened to increase the difficulties some households are encountering in reconciling work and family life—when what current studies are showing is that it is precisely that kind of support, aimed at helping families reach that equilibrium, that works in favour of women’s employment, improves family living standards and explains why fertility in France is so dynamic.
Critics accuse the new policy measures of calling into question the fundamental principle of family allowance universality. What’s your opinion on this point?
First, the universality principle does not necessarily imply that benefit amounts should all be the same regardless of family income level. There’s a slippage in vocabulary there that may serve some interests but does not serve the interests of clarity.
Second, that principle already seems somewhat eroded in France since only families with at least two children, not one, are eligible for benefits, in contrast to arrangements in all other European countries that allocate family benefits.
Lastly, there seems to me something specious in looking solely at family benefits to assess whether the universality principle has been complied with. In reality, family policy comprises a whole set of different aids, each targeting particular categories of families. Altogether, this seems to be in the interest of all families, regardless of income level. Wealthy households have lost some advantages but they still benefit amply from family allowances through the “family quotient” tax reduction and tax deductions for childcare costs or employing a child-minder. A serious assessment of the impact of recent reforms on families’ net income would dispel doubts on this point.
The present family policy reform seems cast exclusively in terms of cutting expenditures. Do you perceive any long-term orientation?
Seeking to cut expenditures in the family branch of the Sécurité Sociale system means tightly circumscribing thinking on reform when in fact an overall reform of our combined social welfare and tax system might allow us to make equivalent savings, even much more substantial ones, with greater efficiency and coherence. It is odd, for example, that there has almost never been any proposal to reduce the advantages enjoyed by childless married couples or civil union partners compared to simple “cohabitees” by way of the “conjugal [i.e., spouse or partner] quotient” tax reduction.
The “conjugal quotient” represents a total tax benefit of around ten billion euros. Lowering the eligibility ceilings would serve the principle of horizontal equity at the heart of the “family quotient” reduction through a kind of redistribution: from childless households toward families with children. Moreover, according to some studies, the conjugal quotient amounts to a slight disincentive to women’s employment in couples with a high pay differential between partners.
But it would be wrong to see the recent reforms of family policy as aimed only to reduce spending. That there have been reductions is indisputable, but they have gone together with increases in certain benefits for poorer families, an ambitious plan for developing nursery services for young children, and bolstered support for parenthood. The ultimate goal that seems to have been set is to provide greater support to families and children by way of services better adapted to their multiple needs, new family lifestyles, and population diversity. Family policy is adapting to the diversified landscape composed today by the sum of families in France. If there is a kind of universalism that deserves to be defended now, it is perhaps the goal of ensuring that every family has access to services adapted to its needs.
Links for more info
Évaluer l’impact des politiques familiales sur la fécondité [FR]
The political economy of child-related leave policies in OECD member states
Gender Equality (f)or Economic Growth?
Institutional drivers of female labour Force participation in OECD countries
Family policy, fertility and women’s employment: value and limitations of national comparisons