Luxembourg is one of the richest countries in the world, yet around 25% of its children are at risk of poverty or social exclusion. Despite high public spending on children and a balanced investment across childhood, child poverty remains persistently high.
This report analyses how Luxembourg allocates its spending on children, evaluating the impact of three key policy areas: child benefits, parental leave, and childcare. Using microsimulations, findings show that a combined reform of child allowances, childcare services, and parental leave could reduce child poverty to 10.7%, cutting current levels by more than half.
Following these results, it is recommended to strengthen universal and targeted child benefits, expand affordable childcare, improve parental leave accessibility, simplify benefit procedures, and address structural challenges such as high living costs and income inequality.
This publication forms part of the Age-spending and child poverty in Luxembourg project.
