INVESTING IN INFANTS: THE LASTING EFFECTS OF CASH TRANSFERS TO NEW FAMILIES

• 成果类型: Article
• 署名作者: Barr, Andrew; Eggleston, Jonathan; Smith, Alexander A.
• 署名单位: Texas A&M University System; Texas A&M University College Station; United States Department of Defense; United States Army; United States Military Academy
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjac023
• 发表日期: 2022
• 页码: 2539-2583
• 关键词: income-tax credit; head-start; gender-gap; outcomes; IMPACT; opportunity; child; payments; program; birth

摘要

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% 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%-2%, 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.