THE IMPACT OF “FAMILY 500+ PROGRAMME ON HOUSEHOLD INCOMES, POVERTY AND INEQUALITY

We use the microsimulation approach and household budget survey data from 2015 to estimate the shortterm impact of the “Family 500+” programme on household incomes, poverty and inequality. The results suggest that the programme will have the strongest impact on the incomes of households at the lower end of income distribution. Extreme consumption poverty in the whole population is reduced in the range from 35 to 37%, while child poverty in the range from 75 to 100%, depending on the choice of equivalence scale and assumptions about changes in household expenditures. The paper shows also that the programme will reduce the Gini index of income inequality in Poland by a few percentage points. The programme can lead to a lower risk of extreme poverty for households with children as compared to small households (e.g. singleperson households). Analysis based on certain equivalence scales suggests that even before the implementation of the “Family 500+” programme extreme poverty among households with children was comparable or lower than among oneperson or childless house­holds. The progressive impact of “Family 500+” programme on income distribution in Poland may be reduced in the longer run if labour market activity of low income households will be affected negatively.