Strengthening Child Benefits: Options to enhance the Impact of Cash Benefits for Children

Highlights

Child poverty in North Macedonia remains persistently high, affecting nearly one in three children, despite significant social protection reforms in recent years. This report highlights structural limitations in the current cash benefit system, including declining adequacy, limited coverage, and design features that underestimate children’s needs particularly in larger and vulnerable households. Using advanced microsimulation analysis, the study evaluates reform options to improve the impact of child-related benefits. It presents two strategic pathways: expanding universal child benefits with targeted top-ups to ensure broad and equitable coverage and strengthening existing means-tested benefits to deliver deeper poverty reduction among the poorest. Findings show that well-designed reforms can reduce child poverty by up to six percentage points while remaining fiscally feasible. The report outlines key policy directions to build a more child-sensitive, inclusive, and effective social protection system that supports long-term human capital development.