Labeling vs Targeting: How did the Canada Child Benefit affect household bargaining and preferences?

The introduction of the Canada Child Benefit Policy in July 2016 changed the structure of the child benefits households received. The amount of benefits was higher, was under the umbrella label of child benefits and targeted towards the female in dual parent households. We estimate the effect of these changes on the preferences and bargaining power of adults within dual parent households. Using a difference-in-difference strategy within a structural collective household model, we find little evidence that preferences of either men or women changed in response to the increase in child benefits. However, we did find that the policy affected the resource allocation across household members. In particular, it increased female’s resource shares among homeowners, but did not bring about any significant change for renters. We provide possible explanations for this heterogeneous treatment effect based on differences faced by homeowners and renters, either in the females’ outside and inside option, or through differences in their marginal price of shelter.