Full Citation
Title: Benchmarking a Child Allowance Against Free Childcare
Citation Type: Miscellaneous
Publication Year: 2021
ISBN:
ISSN:
DOI:
NSFID:
PMCID:
PMID:
Abstract: A universal child allowance is considered a simple and effective policy to reduce adult poverty, child poverty, and potentially inequality. It is often compared to childcare subsidies. This study investigates the relative efficacy of provision of free childcare (using a transfer payment equal to the household’s expenditure on childcare as a proxy) and of a child allowance with the same fiscal burden (a payment made to each child’s guardian equal in value to the value of the total program divided by the number of children). We use US Current Population Survey data aggregated over the 2018-2020 period to simulate the impact of each policy on measures of poverty and inequality, stratifying results by state. We perform a secondary analysis using state-based cost of childcare estimates from the Center for American Progress to represent necessary expenditure on childcare. We find modest improvements in measures of adult poverty and inequality that are substantially larger for the child allowance. We find relatively large reductions in the child poverty rate that are much larger for the child allowance policy. We find substantial heterogeneous effects by state, though the impact of the child allowance is almost unilaterally greater.
User Submitted?: No
Authors: Walker, John; Ghenis, Max
Publisher: UBI Center
Data Collections: IPUMS CPS
Topics: Family and Marriage, Poverty and Welfare
Countries: