Family policy for young families: Effects of the CDU/CSU’s family grant concept

This study examines the effects of the introduction of a “family grant” proposed by the CDU/CSU parliamentary group. The analysis is based on the empirical micro-simulation developed for the Ifo Institute by Bruno Kaltenborn, Bonn. The impact of the introduction of a family grant – including all major elements of the German tax and transfer system – are considered both for selected family types and also with regard to the introductory costs and the aggregated labour-supply effects. A macro simulation to estimate the long-term budgetary and labour market effects in terms of refinancing the grant is also carried out.