Barely two months in, this has already been a year of significant challenges. For many of us, the stories of struggle most likely to break our hearts feature children at risk. There are also pragmatic reasons for directing our attention to children’s health and well-being. It’s a cliché, but also true: They are the future.
So, some good news! Despite the pandemic, power outages, and political polarization, there is growing interest in a policy change that would have enormous health and other benefits for children, families, and our society in coming years.
Both the Biden Administration and Sen. Mitt Romney have plans that would send parents monthly payments for each child (in the range of $250-300). The payments would be most generous in the early years that are so critical for child development, and they would phase out as family income increases.
Child allowances have been widely adopted around the world, including in Canada in 2016. While the U.S. currently has a child tax credit, its meager compared to support in comparable countries and inequitable to boot, with many low-income families unable to take full advantage. Roughly 9.6 million U.S. children currently live in poverty.
The evidence base for change is robust. When a committee of the National Academy of Sciences (NAS) issued a report on reducing child poverty and increasing child health and well-being in the U.S., instituting a child allowance was a primary recommendation. Many studies have shown an association between family poverty, impaired brain development, and poor physical and mental health.
Based on a comprehensive review, the committee concluded that there is evidence that poverty causes these problems in children (and that public programs supplementing income ameliorate them). And it’s easy to grasp the connections intuitively.
For example, income insecurity also means food insecurity and housing insecurity, including the toxic stresses and burdens that come with worrying about malnutrition, hunger, eviction, homelessness, and navigating the over-stretched and patchy systems that exist to provide aid. These problems have only been exacerbated by the pandemic, especially for parents with young children.
It is legitimate to raise concerns. Fortunately, because child allowances are so common, there is a lot of evidence addressing them:
- Work disincentives. In a policy brief, Lyman Stone, research fellow at the conservative Institute for Family Studies, notes that in Canada implementation of the child allowance led to more women working. Other research suggests a modest reduction in work effort, particularly among married women.
- Irresponsible procreation. Might child allowances create a boom in unwed parenting? The evidence marshalled by Stone suggests no association between benefits like the child allowance and the marital composition of births. The exception is the United Kingdom, where policies favored unmarried parents. Also, the payments are not generous enough to make having children attractive as a for-profit enterprise.
- Cost. While the Romney plan would pay for the child allowance with cuts to existing programs that benefit poor children, Stone notes that there are several options for sustainable support that should be acceptable to many conservatives, such as increasing excise taxes. (The Biden plan, with a $110 billion price tag, would expire after a year, dodging long-term funding questions.)The NAS committee estimated that a $3000/year child allowance would cost about $54.3 billion annually. It found that current child poverty levels are associated with lost productivity, excess costs of crime, and excess health expenditures totaling between $800 billion and $1.1 trillion annually.
If all of this is true, why doesn’t the U.S. already have a child allowance? Americans appear to have fallen into the habit of thinking in individualistic, zero-sum, transactional terms (reinforced if the child allowance is part of the tax system, suggesting to many that only children whose parents pay taxes should benefit), or in terms of “welfare,” a word associated with an unpleasant stew of stigma, humiliation, condescension, and implicit – sometimes explicit – racism.
The NAS report suggests that we need a reset, embracing (as we used to) social investments that increase our collective well-being. Heather McGhee, former president and currently a distinguished senior fellow of Demos, a non-profit progressive U.S. think tank, refers to these kinds of outcomes as “Solidarity Dividends.”
In sum, it’s hard to find a policy that is without trade-offs or the potential for unintended consequences, but the child allowance is pretty darn close. And wouldn’t it be amazing if people were to look back on 2021 as the year the U.S. adopted a policy that unleashed the full potential of all its children?