Child Welfare in Albania Using a Collective Approach

The present article aims at contributing to the literature on children welfare evaluation by taking into account intra-household distribution of resources and, as a consequence, intra-household inequality. This task cannot be accomplished within the standard framework of unitary models of consumption, and equivalence scales help only partially, since their scope is different. To investigate what happens within the family's black box, a collective consumption model is estimated and the predicted sharing rule is used to draw some conclusions about the role played by intra-household inequality for children's welfare in Albania. The model is also used to look at the effects that different public policies can have on child welfare. The results show that taking into account intra-household inequality raises the Gini coefficient of children's welfare by nearly 10 percentage points and in-kind transfers are more effective than cash transfers in improving children's wellbeing.