Child Benefit Portfolios Across OECD Countries

Current research on the cross-national pattern of investment in child benefits mostly adopts the total resources approach and the model family method. The total resources approach conducts a broad comparison of the aggregate expenditure of different types of child benefit across countries. The model family method adds sophistication by comparing the values of child benefit packages of different countries, which combines different levels of spending in each type of child benefit, based on different family types with certain assumed characteristics. To complement the existing approaches, this study uses cluster analysis to classify countries into groups of similar investment strategies by simultaneously counting the different types and levels of child benefits of all countries. The findings show that four types of child benefit investment portfolio, namely Active, Moderate, Conservative, and Minimal, can be identified across OECD countries. While some studies have focused on the effects of individual types of child benefit on child outcomes, little is known about the effects of child benefits as a whole. The pattern of child benefits as investment portfolios could serve as a basis facilitating further investigation into its relationship with child outcomes. Preliminary findings indicate that child poverty, health, and satisfaction with school life differ significantly across investment portfolios, especially Active Investment outperforms Minimal Investment consistently.