University of Wisconsin–Madison
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Cash for kids

Children who grow up in poverty are much more likely than their more-advantaged peers to be poor as adults. Poverty in childhood is also correlated with physical and mental health problems, lower test scores, and diminished social and emotional well-being, all of which strongly predict income in later life. In addition, there is evidence that the chances of poor children overcoming disadvantage in adulthood are shrinking over time. Recent evidence has shown that programs such as the Earned Income Tax Credit (EITC) that provide cash to poor families can produce positive effects for children in both childhood and later life. However, some poor families with children do not receive the EITC or other income supports available through the tax system because their parents do not work, or work but do not file taxes. We propose supplementing or replacing the current complex and hard to access system of income supports with an annual universal child benefit of $2,000 per child. This reform would be simpler and more equitable than the current system, and could be implemented without any additional funding by redistributing current spending.

Categories

Child Development & Well-Being, Child Poverty, Children, Economic Support, Financial Security, Social Insurance Programs

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