In 2020 and 2021, parents received a total of 450 euros per child from the federal government. However, the desired effect on the consumption, which had slackened due to Corona, did not materialize.
According to an analysis by the Bundesbank, the state “child bonus” paid in the Corona years 2020 and 2021 hardly boosted consumption, which had slackened during the pandemic.
Overall, “only a very limited consumption impulse from the child bonus can be determined”, is the conclusion of the elaboration published on Monday by the Bundesbank’s economic department. “The child bonus should therefore be seen less as a fiscal stimulus and more as a redistribution instrument from the general public to families.”
The federal government had given parents a total of 450 euros per child in three installments in 2020 and 2021. The government’s goal, in its own words, was “to provide a strong, concentrated economic stimulus that families would use directly”.
In their analysis, the Bundesbank’s economists 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 more precisely determine the effect of the “child bonus” on household spending, the economists also carried out a series of estimates.
The result: Households spent just 5.4 cents per euro of the 450 euros “child bonus” on short-lived consumer goods and 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, it was calculated to be just €63.90.