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Child cash benefits and family expenditures: Evidence from the National Child Benefit

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  • Lauren E. Jones
  • Kevin Milligan
  • Mark Stabile

Abstract

Income may improve child outcomes through two mechanisms: as a direct input into health and education, or indirectly, by reducing household financial stress. We exploit policy‐induced changes in refundable tax benefit income in Canada to study these two potential mechanisms. Our findings suggest that additional income may improve outcomes through both mechanisms: some benefit income is spent on direct education inputs, while some is spent on everyday items likely to improve the general conditions children face. Additionally, some families reduce spending on risky behaviour items. Spending responses to benefit generosity appear to vary by income and by child age. Prestations pour enfants en espèces et dépenses des familles : ce que révèle la Prestation nationale pour enfants. Le revenu permet d’améliorer le développement d’un enfant grâce à deux mécanismes : en contribuant directement à l’éducation et à la santé, et en réduisant indirectement les difficultés financières au sein du foyer. Afin d’étudier ces deux mécanismes, nous nous appuyons sur les modifications politiques apportées au crédit d’impôt remboursable de type prestation fiscale pour revenu de travail au Canada. Nos résultats suggèrent que par l’entremise de ces deux mécanismes, la situation peut s’améliorer grâce à un revenu additionnel : une partie de ces prestations est dépensée directement pour l’éducation tandis qu’une autre est utilisée pour les biens quotidiens susceptibles d’améliorer les conditions de vie générales de l’enfant. De plus, certaines familles réduisent les dépenses d’articles pouvant induire des comportements à risque. Les types de dépenses liés aux prestations sociales semblent varier en fonction des revenus et de l’âge des enfants.

Suggested Citation

  • Lauren E. Jones & Kevin Milligan & Mark Stabile, 2019. "Child cash benefits and family expenditures: Evidence from the National Child Benefit," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(4), pages 1433-1463, November.
  • Handle: RePEc:wly:canjec:v:52:y:2019:i:4:p:1433-1463
    DOI: 10.1111/caje.12409
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    Cited by:

    1. Elizabeth M. Caucutt & Lance Lochner & Youngmin Park, 2017. "Correlation, Consumption, Confusion, or Constraints: Why Do Poor Children Perform so Poorly?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(1), pages 102-147, January.
    2. Lebihan, Laetitia & Mao Takongmo, Charles-Olivier, 2018. "The impact of universal child benefits on family health and behaviours," Research in Economics, Elsevier, vol. 72(4), pages 415-427.
    3. Elizabeth M. Caucutt & Lance Lochner, 2020. "Early and Late Human Capital Investments, Borrowing Constraints, and the Family," Journal of Political Economy, University of Chicago Press, vol. 128(3), pages 1065-1147.
    4. Randall Akee & William Copeland & E. Jane Costello & Emilia Simeonova, 2018. "How Does Household Income Affect Child Personality Traits and Behaviors?," American Economic Review, American Economic Association, vol. 108(3), pages 775-827, March.
    5. Peter Burton & Shelley Phipps, 2017. "Economic Well-Being of Canadian Children," Canadian Public Policy, University of Toronto Press, vol. 43(4), pages 299-330, December.
    6. Mari, Gabriele & Keizer, Renske, 2020. "Families of Austerity: Welfare Cuts and Family Stress in Britain," SocArXiv vdej8, Center for Open Science.
    7. Melanie E. Guldi & Amelia Hawkins & Jeffrey Hemmeter & Lucie Schmidt, 2018. "Supplemental Security Income and Child Outcomes: Evidence from Birth Weight Eligibility Cutoffs," Department of Economics Working Papers 2018-12, Department of Economics, Williams College.
    8. Hansoo Ko & Renata E. Howland & Sherry A. Glied, 2020. "The Effects of Income on Children’s Health: Evidence from Supplemental Security Income Eligibility under New York State Medicaid," NBER Working Papers 26639, National Bureau of Economic Research, Inc.
    9. Claire McCartan & Aine Morrison & Lisa Bunting & Gavin Davidson & Jackie McIlroy, 2018. "Stripping the Wallpaper of Practice: Empowering Social Workers to Tackle Poverty," Social Sciences, MDPI, Open Access Journal, vol. 7(10), pages 1-16, October.

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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