The Case For a U.S. Child Benefit

The United States remains the only major country in the world without a child benefit—regular payments from the government to most or all families with children, not conditioned on parental employment—despite overwhelming evidence of the benefits of such policies.

In her new book, Child Benefits: A Smart Investment for America’s Future,  Jane Waldfogel, the  Compton Foundation Centennial Professor at the Columbia University School of Social Work, looks at why the U.S. is such an outlier despite its high child poverty rates.

Waldfogel’s book was the topic of a recent webinar co-hosted by Columbia’s Center on Poverty and Social Policy, the Columbia Population Research Center, the Columbia School of Social Work, and the SIPA Institute of Global Politics–Women’s Initiative.

Waldfogel said that while she’s always been struck that the U.S. is the only wealthy country that doesn’t have a child benefit, the impetus for her book was growing interest in both parties in doing more for children, whether it’s increases to the Child Tax Credit or a variety of proposals to establish “baby bonds.”

“I’ve always been struck, as others have been, that the United States is the only wealthy country that doesn’t have a child benefit. But I was also struck increasingly at how much we were moving toward a child benefit and how live an issue it’s been in the last few years,” Waldfogel said. “So, it just seemed a really good moment to bring together the evidence so policymakers would have it available.”

The evidence of the positive impacts of child benefits worldwide is overwhelming, Waldfogel said. Many countries have had universal or near-universal child benefits for close to a century, not based on work requirements and usually paid out monthly or sometimes even more frequently.

“There’s only one country that isn’t universal, that says you have to work in order to qualify for these benefits, leaving out the lowest income families, who don’t have enough earnings. That’s the United States,” Waldfogel said.

While the recent increases in the CTC have produced dramatic decreases in child poverty, Waldfogel said that benefit would have to be made much more generous and its eligibility extended in order to qualify as the kind of child benefit most other wealthy nations offer.

“We exclude the lowest-income children—that’s one way in which the CTC is not a child benefit. The other big difference is that is paid as a lump sum, once year . . . and that really does make a difference in terms of family budgeting,” Waldfogel said.

Waldfogel’s book summarizes findings from dozens of studies from the 38 OECD (Organization for Economic Co-operation and Development) countries that have found that parents use their child benefit for crucial necessities for their children—books, toys, clothing, footwear, housing, and transportation.

Waldfogel said another really consistent finding is that families don’t spend the money on alcohol or tobacco and in fact there is evidence that spending on alcohol and tobacco goes down. Studies in the U.S. after the 2021 CTC expansion found much the same pattern, Waldfogel said.

Waldfogel said that while she’s heartened by the current bipartisan support for expanding the CTC, she’s also discouraged by the “lack of understanding for extending eligibility.”

“If you raise benefits without extending eligibility, you’re not going to help poor kids,” Waldfogel said. “Currently, one quarter of American children don’t get the full $2,000. Some of them get nothing. That is just crazy.”