Child Allowance Would Be Huge Boon to Working Families, Especially Black and Latino Families

Earlier this week, I argued that a child benefit, an unconditional per-child cash benefit paid out to parents, would disproportionately benefit Blacks and Latinos. This is because children make up a large share of the Black and Latino poor.

To get a sense of how disproportionate the benefit would be, I went into the 2013 ASEC and added $3600 per child to every family, which is equal to a per-child benefit of $300/mo. I then determined how that income addition changed the poverty outcomes of poor people overall and poor people in each race. Put simply, I wanted to see what the effect of a $300/mo child benefit would be on poverty holding all else equal.

Here is what the result looks like overall, broken down by the eight life status categories I regularly use to classify the poor.

Here is the same graph for the White poor:

Here is the Black poor:

Here is the Latino Poor:

The child benefit reduces overall poverty by 22.9%, White poverty by 16.7%, Black poverty by 25%, and Latino poverty by 31%.

Children obviously get the biggest boost from the benefit. Across all races, child poverty drops by a little over 40%. The group benefiting the second most are the fully employed (i.e. able-bodied adults aged 18-64 who worked for 50+ weeks). Their poverty levels fall 34% overall, 28.4% for Whites, 36.4% for Blacks, and 41.1% for Latinos.

Both overall and across all races, around 75% of the people kept out of poverty by the child benefit are either children or the fully employed.

More than any other welfare benefit out there, this truly is a program for poor working families. In fact, it's a benefit for nearly all families with children, poor or not, since it is universal. Middle-class families would no doubt enjoy their $300/mo check as well. The child benefit is easy to administer, very affordable, common throughout the world, has a big impact on poverty, and very disproportionately benefits Blacks and Latinos. This should be a leftist and even liberal no-brainer. There is no lower hanging anti-poverty fruit out there.