Analysis: Bundesbank: Corona “child bonus” hardly boosts consumption

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Bundesbank: Corona “child bonus” hardly boosts consumption

The Bundesbank analyzed the average monthly consumer spending of households with and without children for the period July 2020 to June 2021.

Photo: DPA

In 2020 and 2021, parents will receive a total of 450 euros per child from the federal government. However, the desired effect on the reduced consumption due to the corona did not materialize.

Frankfurt am Main. According to an analysis by the Bundesbank, the state “child bonus” paid in the Corona years 2020 and 2021 hardly boosted consumption, which was reduced during the pandemic.

The detail published on Monday by the Bundesbank’s economic department comes to the conclusion that overall “only a very limited consumption impulse can be seen from the child bonus”. “The child bonus should be seen less as a financial incentive than as a means of redistribution from the general public to households.”

The federal government has granted parents a total of 450 euros per child in three installments in 2020 and 2021. In its own words, the aim of the federal government is to “give a strong, targeted economic stimulus that families can use directly”.

In their analysis, economists at the Bundesbank compared the average monthly consumer spending of households with children and households without children in the period from July 2020 to June 2021. In order to determine the effect of the “child bonus” on household spending more precisely, economists also prepared a number of estimates.

The result: Households spent only 5.4 cents per euro of the 450 euros “child bonus” on short-term consumer goods, i.e. a total of 24.30 euros. Even taking into account spending on consumer durables and services, which are not included in the data, the figure came out at just €63.90.

© dpa-infocom, dpa:220613-99-648773/2

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