International review of approaches to tackling child poverty: Croatia

Assessing the role of Government intervention in child poverty reduction

This section brings together the policies and wider context discussed in previous sections to provide an assessment of how far interventions and their outcomes were designed to tackle child poverty. To do this, we assess factors according to the following criteria:

• Direct: The intervention was the result of Government action specifically targeting reducing child poverty or maintaining it at low levels.
• Indirectly targeted: The intervention was the result of Government action targeted at improving the wellbeing of families and children, but not specifically targeted at reducing child poverty, or maintaining it at low levels.
• Indirect: The intervention was the result of Government action targeted at broader aims or objectives that have had a positive – if indirect – impact on reducing child poverty or maintaining it at low levels.
• Induced: Action was instigated by wider social and/or economic change, an outside body or a non-Governmental organisation.

Level of Government intervention in poverty reduction factors

The interventions mentioned in the case study and their outcomes are classified as below:

1. Direct

• Child allowance

2. Indirectly targeted

• Maternity leave
• Parental leave

3. Indirect

• Old-age pensions^[118]
• Guaranteed Minimum Benefit

4. Induced

• Rural development programmes targeting low-income and war-affected regions
• EU social fund programmes for social inclusion, vocational training, and early childhood education such as the European Child Guarantee
• EU Recovery and Resilience Plan (2021) which allocates funding for social policies, including child poverty reduction

Lessons for Scotland

Reduction in child poverty in Croatia was largely due to wider factors such as rapid economic growth and strong labour market participation. Additionally, events like the breakup of Yugoslavia and the subsequent Croatian War of Independence led to a lower baseline from which the upward trend in poverty reduction was measured. Poverty being a relative measure, it naturally showed decreased rates once the political situation was stabilised, and economic growth had taken off. However, Croatia has also taken specific steps towards reducing poverty and improving the wellbeing of children. Some of the key takeaways from this analysis that can be drawn from Croatia’s experience are as follows:

• With the exception of the economic impact of the Covid-19 pandemic, Croatia has seen impressive economic growth for the best part of a decade, alongside steady wage growth. This has been especially beneficial for lower-income workers, and for boosting female labour market participation. Economic growth is important in and of itself, but equally crucial is ensuring this growth benefits those on low-incomes and improves gender equality outcomes. In addition to this, Croatia implemented several reforms in parental leave policies to enhance gender equality and support families. These measures have enabled parents, especially women, to maintain their employment while managing child-rearing responsibilities. Stakeholder interviews highlighted this area of reform as crucial for driving economic growth and alleviating poverty.
• A basic income guarantee such as Croatia’s Guaranteed Minimum Benefit (GMB) can in theory be a potentially powerful measure to lift those in need out of poverty. However, its implementation in Croatia was not successful and ended up with the number of beneficiaries falling due to the way the benefit amount was calculated, and threshold was set. As discussed in the earlier section, the scheme did not serve its intended purpose as the allowance itself was inadequate and the scheme had low coverage. This goes to show that the way such policies are designed and implemented can make a big difference to the eventual outcome. The key lessons to draw from analysis of the gaps in Croatia’s GMB implementation is to take into account various factors such as relative poverty within the country, inflation, consumer baskets and more, while deciding the base benefit amount. It is important that the benefit increases in line with the real cost of living over the years to achieve its intended objectives.
• Targeting policies at those with additional needs is important to overall child poverty reduction and for reducing poverty amongst at-risk groups. In particular, social security in Croatia supports families with additional needs. For example, child benefit policies have supplements for each additional child. Moreover, the child allowance and GMB (however inadequate) increase the financial assistance to meet the additional needs of single-parent families.