Use of Education and Inclusion Subsidies By Children in Low-Income Families: Who Is Left behind?

Economic deprivation among children and adolescents is a highly relevant issue in Germany, as children face a high risk of living in relative poverty and their poverty rates are even on the rise. Therefore, Germany increased political efforts to overcome this problem. In 2011, the Federal Government introduced “Education and Inclusion Subsidies” for children in low-income families. These additional means-tested benefits are aiming at improving material welfare as well as social inclusion, e.g. through covering costs for school trips, daily meals or cultural activities. From the very beginning, the question was raised whether the new benefit program really meets its objectives. One major problem is that complex and restrictive bureaucratic procedures of the program may provoke serious inequalities in terms of access to subsidies due to lack of information and opportunity costs. Claiming for subsidies may require substantial resources, such as knowledge of eligibility rules, expenditure of time as well as availability of participation possibilities at the place of residence. Thus, claimants with a low level of resources might be less likely to get access. Our main research questions are as follows: Are descendents from immigrant parents with limited knowledge of German and children with several siblings underprivileged groups who are left behind? Do the usage patterns differ across urban, suburban and rural regions? The analysis is based on representative micro-level data from the most recent wave of the German Panel Study “Labor Market and Social Security” (PASS), which is available from October 2013. PASS is a novel dataset in the field of labor market, welfare state and poverty research in Germany. The questionnaire includes several items concerning knowledge and usage of “Education and Inclusion Subsidies” for the first time. It also contains comprehensive information on the income and living conditions of different types of households.