BC Basic Income Panel

Research Papers


Cash Transfers and Child Outcomes

Lauren Jones (Ohio State University), Mark Stabile (INSEAD)

This paper focuses on the treatment effects of various existing programs around the English-speaking world that transfer money to families with children, either through work-based or unconditional transfers. Work-based programs are those that require labour force participation in order to qualify. Unconditional transfers simply require that children be present in the household. In Canada, the larger benefit programs targeted at families with children have been unconditional in nature. This paper shows that income support programs are an effective tool to promote child well-being. Further, while there are potentially positive gains for most families from this income support, the largest benefits are likely to be found among lower-income families. Even modest child benefits contribute to closing test score gap between the least disadvantaged and most disadvantaged children. The paper concludes that some questions about the efficacy of income supports remain. These include whether more targeted benefits had disproportionately larger effects on test scores, and whether the method benefit delivery within the context of income support programs is an important element of policy design.

Read paper

Evaluating the Canada Child Benefit

Michael Baker & Kory Kroft (University of Toronto), Mark Stabile (INSEAD)

While poverty afflicts many demographic groups, child poverty is typically viewed with particular concern. In response, governments in many countries have designed social programs to provide resources to families with young children. These take various forms including targeted means-tested cash transfers, in-kind transfers, vouchers for services, or services themselves. Which of these alternatives is the most successful at reducing child poverty while at the same time being affordable remains an open question. This paper attempts to answer this question by examining the effect of the introduction of the Canada Child Benefit (CCB) on child poverty and family labour supply. Our analysis indicates that there was a decline in poverty, with much of the relative decline being confined to a reduction in the poverty rate of single mothers. However, this appears to be due to an increase in poverty in single women without children. We find no evidence of a labour supply response to either of the program reforms on either the extensive or intensive margin.

Read paper

How Did the Canada Child Benefit Affect Household Spending?

Paniz Najjarrezaparast & Krishna Pendakur (Simon Fraser University)

In this study, we assess how the increase in the Canada Child Benefit (CCB) in July 2016 affected household spending on various types of consumption. The increase was more than $2,000 per child per year for most recipient households, so it represented a very large increase in transfers to households with children. Further, because the CCB has a very low tax-back rate, the policy change was similar to raising the rate in a universal basic income scheme. We assess the effect of the policy change on a measure of overall consumption, and its seven constituent categories: clothing, food, health care, household operation, recreation, shelter, and transportation. We focus on households whose income is below the median income (as this is the principal policy target), and evaluate effects for renters and owners separately. We find statistically significant effects of the policy change only for spending on clothing, food, and shelter, and these arise only for rental-tenure households. We find that rental-tenure households with children below the median income increased their annual consumption by roughly $3,000 in response to the CCB increase of roughly $4,300 for these households. With average annual consumption around $30,000, this represents an increase in consumption of roughly 10% for these households. They increased spending on food by roughly $700, and on shelter by nearly $1,400. They increased spending on clothing by roughly $300, but only on children’s clothing and not on adult clothing. We find mild evidence that households with more children responded differently to those with fewer children, in particular, that shelter spending rose by much more for the former households. That the policy changed increased spending on the necessities of food, shelter, and clothing suggests that it achieved some measure of success in improving the consumption of lower-income households with children. The lion’s share of the increased spending was allocated to increased shelter spending for rental-tenure households. We find weak evidence that these households moved after the policy change. But given the existing evidence that low-income housing supply may be quite inelastic, it is possible that rent price increases ate up this increased spending. More research on this question, using different data, is needed.

Read paper

Reform of Child Benefits for British Columbians

Jonathan Rhys Kesselman (Simon Fraser University)

Since its pioneering introduction of the B.C. Family Bonus in 1996, by 2020 British Columbia went from being the leader to the laggard among Canadian provinces in its child benefit program. Only with its implementation of the B.C. Child Opportunity Benefit in late 2020 did the province renovate its scheme, which is still less targeted on poverty reduction than the other provincial child benefit programs. This paper explores alternative scenarios for B.C. to restructure its child benefits so as to target poverty much more effectively. It explores variants that would be cost-neutral, save costs, and expand costs. One of the cost-neutral alternatives could increase the maximum annual benefit per child by nearly half—to $2,355 from $1,600 for the first child in a family. Its benefits would go disproportionately to sole-parent families on account of their high poverty rates. A reform of this genre would also allow B.C. to take the last step in “getting the kids off welfare” by restructuring Income Assistance rates. The paper further explores the even greater potential for relieving poverty among B.C. families by obtaining discretion for cost-neutral increased income targeting of the much larger Canada Child Benefit program.

Read paper

All Rights Reserved.

Web Director | Corey Allen

Web Designer | Kimberly Leung

Web Developer | Armadillo Creative