With Joe Biden (and, uh, Mitt Romney) proposing to send out direct cash payments to parents, there’s a pretty direct parallel we can look to to see what the impact would be — Canada!
Biden’s proposing to give parents $3,600 per child under the age of six, as well as $3,000 per child aged 6-17.
washingtonpost.com/us-policy/2021…
This is almost exactly the same program as the Canada Child Benefit introduced in 2016.
washingtonpost.com/us-policy/2021…
This is almost exactly the same program as the Canada Child Benefit introduced in 2016.
The Canda Child Benefit is more generous (around $6,700 for young kids per year, $5,700 for older kids) but has basically the same structure, including phasing out for higher-income families. So how did it go?
At the time the Liberal government was targeting a 20% decrease in the poverty rate by 2020. Did that happen? No.
They hit it by 2017.
They hit it by 2017.
In a year of the CCB being enacted, the number of children living in poverty was reduced by 278,000.
It also ended up being a major boost to the economy, with the former Bank of Canada governor saying the program was “highly stimulative."
It also ended up being a major boost to the economy, with the former Bank of Canada governor saying the program was “highly stimulative."
There’s nothing novel about what Canada did. Most rich countries give money to parents to help raise children. The US, however, is stingier and, surely coincidentally, has a high child poverty rate by developed world standards (though things were improving pre-Covid)
Anyway the shocking lesson here is if you give money to parents to raise children, fewer children will be raised in poverty. Also parents will spend that money and stimulate the economy. Canada did what Biden/Romney are proposing and it went great.
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