engleski

The distributional impact of local social benefits of Zagreb, Split, Rijeka and Osijek

All government levels in Croatia provide social protection benefits. Other than the central level, benefits are also provided at the local and regional level: by counties, cities and municipalities. According to Šućur et al. (2016), more than 0.4% of GDP is spent on social benefits provided at the local government level. Therefore, it is important to include local government benefits when assessing the overall effectiveness of social benefits. The aim of this paper is to analyse the distributional impact of five types of local social benefits in the four major Croatian cities – Zagreb, Split, Rijeka and Osijek – which is a first analysis of this kind for Croatian cities. The year of analysis is 2017 and the benefits under consideration are compensation for housing costs, old-age income supplement, grant for a newborn child, kindergarten subsidy and city transport subsidy. A comparative analysis of benefits and their generosity has been conducted ; their income redistribution and poverty reduction effects have also been investigated. The research makes use of miCROmod – the Croatian tax-benefit microsimulation model - which is based on data from the Income and Living Conditions Survey, collected by the Croatian Bureau of Statistics. Hypothetical households, which differ in income levels, structure and age of members, have also been used in the analysis. Results reveal that, in all local benefit systems considered, the most significant resources are devoted to the city transport subsidy and the kindergarten subsidy. If we compare the per capita values, the most generous benefits are found in Zagreb, followed by Rijeka, Osijek and Split. Also, social protection benefits of Zagreb and Rijeka are the most redistributive, achieving the highest poverty headcount reduction.

miCROmod ; local self-government ; social protection benefits ; Croatia ; public finance

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