Trésor-Info - Publications de la direction générale du Trésor - Family-policy

The Economic Issues Surrounding Redistribution to Families

2025-02-27T00:00:00+01:00

Since its introduction in the 1930s, family policy has been resolutely directed towards childbirth goals by horizontal redistribution from childless households to those with children. The first major change took place in the 1970s with the start of vertical redistribution from wealthy families to low-income ones. Family policy expenditure now encompasses a large number of objectives, including support for early childhood and gender equality.

Family policy has adjusted itself to socio-demographic changes in recent decades, in particular the increase in women in the workforce and single-parent families.

Today, family policy has three main goals: contributing to offsetting family expenses, helping vulnerable families and ensuring a work-life balance. To achieve its targets, the policy comprises tax schemes (essentially income splitting, the quotient familial), universal or means-tested monetary allowances, increased welfare benefits depending on the age or number of children, and the provision of public childcare services.

The French welfare and tax system now focuses mainly on low-income families, single-parent families and large families for which the poverty rate is higher than for other families. Besides income levels and the number of children, the additional monetary benefits paid for having children depend on their age and birth order. Nevertheless, changes to welfare and tax transfers based on these criteria are not always commensurate with the increase in costs for families. In addition, the "layering" of schemes creates changes in the amount of means-tested benefits paid per child that are difficult to understand (see Chart).

Childcare options conducive to a work-life balance are thought to have a stronger impact on fertility rates than the monetary benefits under family policy.

Unequal Access to Day Nurseries and Related Economic Issues

2023-01-26T00:00:00+01:00

Government policies for childcare for the under-threes are two-pronged: to support parents’ professional activity and to foster children’s development until they start nursery school (école maternelle). They encompass all postnatal leave arrangements, financial support to cover the cost of formal childcare with a child minder or in a day nursery (crèche), and the provision of a day nursery service.

In the first few months of a child’s life, care by the parents is the most beneficial, all the more so when it is provided by both parents. However, after the first year, formal childcare, particularly in a collective childcare, is preferable for the child, especially if they are from a disadvantaged background. In the long term, funding childcare places for young children enables them to develop their abilities and human capital in general, and helps reduce social inequalities.

The unequal day nursery offering throughout France sometimes hinders access to formal childcare and limits the parents’ ability to work, in particular in single-parent households. In addition, the net cost of formal childcare restricts its use by low-income households. Childcare by parents is mostly provided by mothers and it distances them from the labour market when it lasts too long. As a result, it exacerbates social and gender inequality.

Improved governance by defining a leader from among the many stakeholders is required in order to expand the day nursery childcare offering. In addition, bringing the net cost for childcare by a child minder, which is incidentally less costly for the public purse, more into line with that for childcare in a day nursery, as provided for by the 2023 Social Security Budget Act, would spur recourse to formal childcare by low-income households.