Single Parents - single outcomes?
Author: Ella Getz Wold, ESOP Gender & Economics Scholarship Recipient 2012.
This master thesis seeks to evaluate the social economic wellbeing of single parent households across eleven European countries. Starting with market income, taxes and transfers are incorporated to arrive at a disposable income figure. Effort is further made to include the value of in kind transfers, more specifically education and health care services. This results in an extended income concept, where redistribution both in cash and in kind is accounted for. Income figures for market income and disposable income are retrieved from the Luxembourg Income Study (LIS). The data is based on national surveys from 2004/2005, and include on average 593 single parent households per country. Data on education expenditures are taken from the Euro stat database and include primary and secondary education. In line with previous literature on public services, tertiary education is excluded from the analysis. Data on health care expenditures are found in the OECD Health database, and include all public expenses related to health care. Health care income is allocated to the households based on the so called insurance principle, in which expected health care usage is dependent on age and sex. All income figures, both in cash an in kind, are adjusted according to the square root equivalence scale.
Borrowing from an extensive literature on welfare state typology, the eleven sample countries are classified into five different welfare regimes; Scandinavian, Anglo-Saxon, Bismarckian, Southern and Post-communist. The hypothesis of this thesis is that single parents gain more in welfare regimes with universal, rather than targeted, social benefits, implying that the level of redistribution should be particularly high in the Scandinavian countries. The underlying reasoning is that popular support for public redistribution is higher with universal coverage, thereby resulting in more generous social services. This is in line with the findings of Moene and Wallerstein (2001), Brady and Burroway (2012), Mitchell et al (1994) and Korpi and Palme (1998).
Single parents are found to obtain an equalized market income only 60% as high as other parents. This figure increases to 72% once the tax-transfer system is accounted for, implying an increase in relative income of around 20%. Adding education and health care benefits to the analysis further increases relative single parent income by 10%, resulting in a total equalized income 79% as high as other parents. Cash redistribution is thus found to account for two thirds of the redistributive effect, while the remaining impact is caused by in kind income. Including more publicly provided goods in the analysis should increase the relative importance of in kind redistribution further. Total redistribution is found to be high in the Nordic countries, at above 50%. In accordance with the hypothesis, it thus seems as though single parents are important beneficiaries of universal welfare regimes, even though these do not specifically target low income households. The results further suggest that type of welfare regime is an important indicator in assessing the re-distributional gain directed at single parent households.