Microsimulation & Econometric Data Analysis

For 40 years now, the Federal Foundation Mother and Child has been providing financial aid to pregnant women in economic distress. The Federal Foundation’s annual budget of currently some 95 million euros is paid out to needy expectant mothers via corresponding foundations in the individual states. On behalf of the Federal Ministry for Family Affairs – BMFSFJ, Fraunhofer FIT examined the extent to which socioeconomic criteria are currently taken into account in allocating the federal funds to the state foundations.

While the state foundations grant financial aid based on the socioecenomic need of the pregnant women, similar criteria did not play a role in the allocation of federal funds to the individual state foundations for a long time. This was to change with the introduction of a new allocation scheme in 2020. It takes into account the previous year's funding, the economic strength of a state, the risk of poverty among its women and the number of births in allocating funds to a state-level foundation.

Fraunhofer FIT was commissioned to examine how the payments to the individual state foundations have changed in the past as a result of the modification to the allocation scheme, how they are likely to change in the coming years and to what extent the new distribution actually takes socioeconomic criteria into account. To this end, we forecast the time series of budget allocations for the different allocation schemes and juxtaposed the resulting distributions of funds to that of the current scheme.

Our results revealed a number of flaws in the current allocation scheme that might have a significant long-term impact on the distribution of federal funds to the state foundations. In a second step, Fraunhofer FIT therefore worked closely with BMFSFJ in designing alternative allocation schemes that place even greater emphasis on socioeconomic criteria than is currently the case, while being easy to implement at the same time.

It may be challenging to convince politicians to agree on one of these alternative allocation schemes. Every change is associated with redistributions between the individual state foundations: While some will benefit, funding for others may decrease. We stand ready to support the ensuing political process by providing valid and up-to-date figures and comparisons, even at very short notice.