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Do Child Tax Benefits Affect the Wellbeing of Children? Evidence from Canadian Child Benefit Expansions

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  • Milligan, Kevin
  • Stabile, Mark

Abstract

A vast literature has examined the impact of family income on the health and development outcomes of children. One channel through which increased income may operate is an improvement in a family’s ability to provide food, shelter, clothing, books, and other expenditure-related inputs to a child’s development. In addition to this channel, many scholars have investigated the relationship between income and the psychological wellbeing of the family. By reducing stress and conflict, more income helps to foster an environment more conducive to healthy child development. In this paper, we exploit changes in child benefits in Canada to study these questions. Importantly, our approach allows us to make stronger causal inferences than has been possible with the existing, mostly correlational, evidence. Using variation in child benefits across province, time, and family type, we study outcomes spanning test scores, mental health, physical health, and deprivation measures. The findings suggest that child benefit programs in Canada had significant positive effects on test scores, as has been featured in the existing literature. However, we also find that several measures of both child and maternal mental health and well-being show marked improvement with higher child benefits. We find strong and interesting differences in the effects of benefits by sex of the child: benefits have stronger effects on educational outcomes and physical health for boys, and on mental health outcomes for girls. Our findings also provide some support for the hypothesis that income transfers operate through measures of family emotional well-being.

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File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2012%20-%20Milligan%20%20Stabile.pdf
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Bibliographic Info

Paper provided by UBC Department of Economics in its series CLSRN Working Papers with number clsrn_admin-2009-21.

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Length: 46 pages
Date of creation: 13 Mar 2009
Date of revision: 13 Mar 2009
Handle: RePEc:ubc:clssrn:clsrn_admin-2009-21

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Related research

Keywords: Child Tax Benefits; Income Transfers; Child Development; Standardized Tests; Mental Health;

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References

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  1. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
  2. Michael Baker & Jonathan Gruber & Kevin Milligan, 2006. "Universal Childcare, Maternal Labor Supply, and Family Well-Being," Working Papers id:547, eSocialSciences.
  3. Joshua Angrist & Daniel Lang & Philip Oreopoulos, 2006. "Lead Them to Water and Pay Them to Drink: An Experiment with Services and Incentives for College Achievement," NBER Working Papers 12790, National Bureau of Economic Research, Inc.
  4. Janet Currie & Mark Stabile & Phongsack Manivong & Leslie L. Roos, 2008. "Child Health and Young Adult Outcomes," NBER Working Papers 14482, National Bureau of Economic Research, Inc.
  5. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
  6. Dynarski, Susan, 2005. "Building the Stock of College-Educated Labor," Working Paper Series rwp05-050, Harvard University, John F. Kennedy School of Government.
  7. Patricia M. Anderson & Kristin F. Butcher & Diane Whitemore Schanzenbach, 2007. "Childhood Disadvantage and Obesity: Is Nurture Trumping Nature?," NBER Chapters, in: The Problems of Disadvantaged Youth: An Economic Perspective, pages 149-180 National Bureau of Economic Research, Inc.
  8. Currie, Janet & Gruber, Jonathan, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 431-66, May.
  9. Gordon B. Dahl & Lance Lochner, 2005. "The Impact of Family Income on Child Achievement," NBER Working Papers 11279, National Bureau of Economic Research, Inc.
  10. Michael Anderson, 2005. "Uncovering Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," HEW 0509008, EconWPA, revised 26 Sep 2005.
  11. Milligan, Kevin & Stabile, Mark, 2007. "The integration of child tax credits and welfare: Evidence from the Canadian National Child Benefit program," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 305-326, February.
  12. Currie, Janet & Stabile, Mark, 2006. "Child mental health and human capital accumulation: The case of ADHD," Journal of Health Economics, Elsevier, vol. 25(6), pages 1094-1118, November.
  13. Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, August.
  14. Martin Dooley & Jennifer Stewart, 2004. "Family income and child outcomes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 898-917, November.
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Cited by:
  1. Dahl, Gordon B. & Lochner, Lance, 2012. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," IZA Discussion Papers 6613, Institute for the Study of Labor (IZA).
  2. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
  3. Lance Lochner & Alexander Monge-Naranjo, 2012. "Credit Constraints in Education," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 225-256, 07.
  4. Libertad González Luna, 2011. "The effects of a universal child benefit," Economics Working Papers 1281, Department of Economics and Business, Universitat Pompeu Fabra.
  5. Lundborg, Petter & Nilsson, Anton & Rooth, Dan-Olof, 2012. "Parental Education and Offspring Outcomes: Evidence from the Swedish Compulsory Schooling Reform," IZA Discussion Papers 6570, Institute for the Study of Labor (IZA).
  6. Kevin Milligan & Mark Stabile, 2009. "Child Benefits, Maternal Employment, and Children's Health: Evidence from Canadian Child Benefit Expansions," American Economic Review, American Economic Association, vol. 99(2), pages 128-32, May.
  7. Patricia M. Anderson, 2010. "Child Care," NBER Chapters, in: Targeting Investments in Children: Fighting Poverty When Resources are Limited, pages 59-75 National Bureau of Economic Research, Inc.

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