1 in 6 American children currently live below the poverty line, a number that far exceeds child poverty rates in other developed and high-income nations. Despite a robust body of research that points to negative developmental outcomes and reduced earning potential for children who grow up in poverty, the U.S. spends only a small fraction of its gross domestic product on redistributive social programs to reach this population and help mitigate the deleterious effects of poverty. According to the National Academies of Sciences, Engineering, and Medicine’s (the National Academies) report, “A Roadmap to Reducing Child Poverty,” social programs such as the Supplemental Nutrition Assistance Program (SNAP), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), housing assistance, and public healthcare play an important role in reducing child poverty despite their limited scope.
The National Academies was directed to conduct this non-partisan evidence-based study of child poverty in the United States in the omnibus appropriations bill of December 2015. Released in February 2019, “A Roadmap to Reducing Child Poverty” includes a review of existing research on the consequences of child poverty, an assessment of the current local, state, federal, and international efforts, a discussion of the contextual factors that affect and produce child poverty, and policy recommendations for reducing child poverty. The National Academies notably highlight stable housing as central to reducing child poverty if expanded.
After exploring ten policy options, the National Academies identified two “packages’ of policies that would reduce child poverty by 50 percent over the next decade. The packages involve: increasing payments for the EITC; making changes to the Child & Dependent Care Tax Credit (CDCTC); increasing SNAP benefits and housing vouchers for eligible families; establishing a child allowance; and raising the minimum wage. Aside from providing greater material resources to support low-income families, the National Academies also explored contextual factors that promote healthy development and long-term success among children. “A Roadmap to Reducing Child Poverty” indicates that unstable income, neighborhood conditions, and discrimination also contribute to negative outcomes of children experiencing poverty. The National Academies urges policymakers to consider these additional factors in the design and implementation of policies aimed at reducing child poverty moving forward.
Russell Sage Foundation Journal of the Social Sciences
Over the past several years, legislators have shown growing interest in expanding and reforming tax credit benefits to address poverty among low-income families. Legislative proposals have varied in scale and scope, but their intended impact has been similar: to lessen material hardship among low- and middle-income families and reduce childhood poverty. Embedded in these initiatives is the notion that raising children is an expensive enterprise that requires flexible financial support to ensure positive outcomes.
In “A Universal Child Allowance: A Plan to Reduce Poverty and Income Instability Among Children in The United States,” Shaefer et. al offer a policy solution to soaring rates of childhood poverty: a universal child allowance that would replace existing piece-meal tax credit programs for all American families. Like universal child allowance programs in developed countries worldwide, the proposal hinges on research that shows that direct income transfers can improve child health and development and reduce costs to other public systems and programs over the long-term. While in-kind benefits tied to employment have also proven successful in supporting low-income families, cash transfers can be used flexibly and are therefore more effective at meeting recipients’ specific needs.
Shaefer et. al outline a universal child allowance that would replace existing tax code provisions with a monthly cash benefit of $250 per child for families of all incomes, with higher benefits for children under the age of 6. By extending the benefit to all families, the authors hope to address concerns related to stigma and political feasibility. The proposal would continue to incentivize employment and complement work-based safety net programs by remaining constant regardless of earnings.
If enacted, it is estimated the universal child allowance would reduce child poverty by 40 percent and cut deep poverty in half.