CSA Childcare Voucher System Reduces Household Poverty Risk Rate to 14.9%

The Chèque-Service Accueil (CSA) or childcare voucher system has successfully reduced the household poverty risk rate in Luxembourg from 16.5% to 14.9%.

An analysis of the impace of the CSA system on the standard of living of househilds has revealed a decline in the household poverty risk rate as well as in the child poverty risk rate. For the years 2013 to 2016, the vouchers reduced the risk of poverty among households from one to two percentage points. Meanwhile, the risk rate of child poverty witnessed a decline of 5.1% in 2016. 

In Luxembourg, poverty indicators show that households with dependent children are much more likely to be at risk of poverty than households with only adults: in 2016 the at-risk-of-poverty rate for households with children was 17.8 % versus only 8.9% for households without children (Statec, 2017). The scale of the CSA therefore provides all the more important benefits for low-income households. As long as households, regardless of income, entrust their children to professional care facilities, thus benefiting from the CSA, this benefit can contribute to reducing inequalities and the risk of poverty.

Income inequality is also decreasing. Indeed, the interquintile ratio, that is the ratio between the percentage of total income received by the 20% of the richest individuals and the total income received by the 20% of the poorest individuals, and the coefficient Gini, are reduced by adding the monetary value of the CSA benefits to household disposable income. The Gini coefficient is a synthetic indicator of inequality that varies between 0 and 100. Its decline reflects an overall decrease in inequality.