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Income assistance, marriage, and child poverty: An assessment of the Family Security Act

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  • Ortigueira, Salvador
  • Siassi, Nawid

Abstract

The COVID-19 pandemic has brought about changes in key income support programs, reigniting a debate about the design of financial aid to low-income households with children. This study assesses the Family Security Act—a proposal presented by Senator Mitt Romney (R-UT) on February 4, 2021 to reform the tax/transfer system—in terms of its efficacy to achieve the stated objectives of increasing marriage rates and cutting child poverty at no cost to the government. The assessment is carried out through a structural microsimulation approach, using a dynamic model of savings, labor supply, household formation, and marital status. We find that while the plan would be highly effective at increasing marriage rates, it would reduce child poverty at the expense of increasing poverty among single-mother families and deep child poverty. Furthermore, the plan would entail a substantial cost to taxpayers. (JEL E21, H24, H31, J12).

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  • Ortigueira, Salvador & Siassi, Nawid, 2022. "Income assistance, marriage, and child poverty: An assessment of the Family Security Act," Economic Modelling, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:ecmode:v:111:y:2022:i:c:s0264999322000736
    DOI: 10.1016/j.econmod.2022.105827
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    Cited by:

    1. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.

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    More about this item

    Keywords

    Income support; Household decisions; Cohabitation and marriage; Poverty;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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