Investing in Infants. The Lasting Effects of Cash Transfers to New Families.

Autor/inn/en	Barr, Andrew C.; Eggleston, Jonathan; Smith, Alexander A.
Institution	National Bureau of Economic Research
Titel	Investing in Infants. The Lasting Effects of Cash Transfers to New Families.
Quelle	Cambridge, Mass.: National Bureau of Economic Research (2022), 46 S. PDF als Volltext (1); PDF als Volltext (2) Link als defekt meldenVerfügbarkeit
Reihe	NBER working paper series. w30373
Beigaben	Illustrationen
Sprache	englisch
Dokumenttyp	online; Monographie; Graue Literatur
DOI	10.3386/w30373
Schlagwörter	Familienleistungsausgleich; Bildungsertrag; Kind; Sozialleistung; Humankapital; Arbeitspapier; Haushaltseinkommen; Wirkungsanalyse; Öffentliche Hand; USA
Abstract	We provide new evidence that cash transfers following the birth of a first child can have large and long-lasting effects on that child's outcomes. We take advantage of the January 1 birthdate cutoff for U.S. child-related tax benefits, which results in families of otherwise similar children receiving substantially different refunds during the first year of life. For the average low-income single-child family in our sample this difference amounts to roughly $1,300, or 10 percent of income. Using the universe of administrative federal tax data in selected years, we show that this transfer in infancy increases young adult earnings by at least 1 to 2 percent, with larger effects for males. These effects show up at earlier ages in terms of improved math and reading test scores and a higher likelihood of high school graduation. The observed effects on shorter-run parental outcomes suggest that additional liquidity during the critical window following the birth of a first child leads to persistent increases in family income that likely contribute to the downstream effects on children's outcomes. The longer-term effects on child earnings alone are large enough that the transfer pays for itself through subsequent increases in federal income tax revenue.
Erfasst von	ZBW - Leibniz-Informationszentrum Wirtschaft, Kiel
Update	2023/1