What a Child Allowance Like Canada’s Would Do for Child Poverty in America

What a Child Allowance Like Canada’s Would Do for Child Poverty in America

Almost all wealthy nations other than the United States provide some form of child allowance to help with the costs of raising children. A notable example is the Canada Child Benefit, which was implemented as one of a number of policies designed to cut child poverty in Canada in half by 2030. The benefit is greatest for low-income families, who receive an allowance of roughly $4,000 per child, per year (with a higher benefit of roughly $4,800 for young children). In the United States, the Child Tax Credit is the largest federal expenditure on children, but unlike child allowances in other countries, it is not structured to reach children who need it most. This report examines how transforming the federal Child Tax Credit into a child allowance similar to the Canada Child Benefit could reduce child poverty in the United States.

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Key Findings: 

  • A child allowance modeled on the Canada Child Benefit could cut child poverty in the United States by more than half, moving 5.3 million children—1.6 million of them young children—out of poverty.
  • Such an allowance would also cut the rate of deep poverty among children by more than half as well, moving 1.5 million children—500,000 of them young children—out of deep poverty.
  • It could cut child poverty by more than half for Black and Hispanic children, though disparities in the likelihood of living in poverty between children of color and White children would remain—a result that is important for all policymakers who advocate for equity. 
  • Cutting child poverty is half is possible with a single policy designed to match the size of the Canada Child Benefit.

This report is published by the Bernard L. Schwartz Rediscovering Government Initiative at The Century Foundation.

Suggested Citation:

Collyer, Sophie, Megan A. Curran, Irwin Garfinkel, David Harris, Mark Stabile, and Jane Waldfogel. 2020. What a child allowance like Canada’s would do for child poverty in America. New York: The Century Foundation.

Published on July 21, 2020