Tax-Benefit Policies to fight Poverty Among Young Adults in Europe

Abstract

European countries offer a large amount of policies to protect the population against the risk of poverty and social exclusion but Young adults generally do not have access to unemployment benefits since their period of contribution is relatively short and in some countries they do not have access to minimum income. In times of high unemployment in Europe, is it possible for young people to access autonomy without family resources? This paper aims to compare the budgetary constraints of young adults to understand the various strategies implemented by different European countries. I rely on microsimulation and hypothetical data to compare identical individuals and to isolate the effect of different tax-benefit systems on the budget constraint of young adults. I find that European countries can be classified into five groups concerning the design of social assistance policies for young people. Belgium, Finland and Denmark, which consider young people as an independant household, while taking into account the situation of cohabitation, are on average more effective in reducing the intensity of youth poverty.