EQUIVALENCE SCALES AND THE WELFARE OF CHILDREN: A COMMENT ON “IS THERE BIAS IN THE ECONOMIC LITERATURE ON EQUIVALENCE SCALES?”

Abstract

In a recent issue of this journal, M. Luisa Ferriera, Reuben C. Buse, and Jan‐Paul Chavas argue that the equivalence scales implicit in the official U.S. poverty line and in public welfare programs overcompensate parents for their children, with resulting negative distributional and incentive effects. We show that their analysis is based on a very particular, and ethically unappealing, assumption about the importance of children's well‐being.