International review of approaches to tackling child poverty: Comparative summary report and key learnings for Scotland

Demographic and economic context

This section details the key economic and demographic metrics for each case study country compared to the Scottish context. Where data for Scotland is not available, a UK comparator has been provided.

These countries were selected on the basis that they:

• are close to the child poverty targets the Scottish Government wants to achieve (Denmark, Finland, Slovenia) and / or have significantly reduced child poverty (Croatia and Slovenia);
• offer some potential applicability to the Scottish context, bearing key similarities either contemporarily or at some point in their historical trajectory;
• have lower rates of child poverty than the UK before the impact of redistributive policies such as social security;
• are part of the European Union (EU), to allow comparative modelling with UKMOD; and
• offer a spread of pre-distributive low child poverty, low child poverty overall, and reductions in child poverty.

All of the case study countries are broadly comparable to Scotland in terms of their overall population, but there are differences across the economic indicators, especially GDP per capita, and family composition. The percentage of single-parent families and average number of children per families in particularly are important differences, as both single parents and large families are typically at higher risk of poverty in all the countries studied. These figures contextualise the child poverty levels in each county, as well as the impact and policy rationale for important policies in each country.

Demographic comparisons

Overall, the population of Scotland is broadly similarly to that of Denmark and Finland. Beyond this, Scotland and the case study countries all face similar challenges to other Western democracies, namely retirees making up a greater proportion of the population, children making up a smaller proportion of the population and, on average, families having fewer than two children. Given the family-friendly policies of Denmark and Finland, the low number of children per household in these and other Nordic countries has been categorised by researchers as something of a ‘paradox’.^[3]

Moreover, given the proportion of children in the population is broadly similar across Scotland and the case study countries, this suggests that, for the purposes of this research, differences in poverty rates cannot be explained by demographics and are more likely a result of wider economic factors and specific policy choices. These individual factors and policies are discussed in detail within each case study report, with key trends and policy comparisons drawn out in this report.

The exception here is the number of single parents, with the number of single parents considerably lower in Croatia (5%) and Finland (13%) than Scotland, Denmark and Slovenia where around a quarter of households with children are single-parent households. All of the case study countries have targeted social security support for single parents, with some such as Denmark combining this with policies to incentivise labour market participation amongst single parents. Again, key trends are discussed in more detail later in this report, with greater detail provided in each case study report.

Economic outlook

Denmark and Finland have the highest GDP and GDP per capita of the case study countries. They are also the countries with the highest tax burden, both as a percentage of GDP and levied on workers. Indeed, Denmark and Finland have some of the highest tax burdens in the Organisation for Economic Co-operation and Development (OECD), being ranked second and sixth respectively for tax-to-GDP ratio and second and third respectively for the net average tax rate for a married couple with two children. Importantly, Denmark and Finland highlight that high tax levels are not incompatible with high levels of economic growth, productivity and better living standards.^[29]

Although GDP and GDP per capita is highest in Denmark and Finland, the average growth rates of these countries since 2005 has been relatively modest. UK average growth in GDP and GDP per capita has been similar to that of Denmark and Finland. By contrast, Croatia and Slovenia have both experienced significant growth in their economies, and in productivity, since 2005. Across the case study countries, growth in GDP and GDP per capita have been the highest in Croatia. As we will see in the next section, this increase in economic growth has coincided with significant reduction in child poverty in both Croatia and Slovenia.

While Scotland’s GDP and GDP per capita is comparable to Finland’s, the UK’s tax burden (both nationally and on workers) is more comparable to Slovenia’s – the lowest of the case study countries. Despite the Office for Budget Responsibility (OBR)’s March 2025 Economic and Fiscal Outlook highlighting that the UK’s tax take has reached historically high levels,^[30] by international standards the UK’s tax burden could be categorised as fairly average with the UK’s tax-to-GDP ratio ranking 18^th out of 38 in the OECD.