Money Matters Early: How Income Policies Shape Child Health, Safety, and Long-Run Opportunity

Session Submission Type: Panel

Abstract

The short- and long-run effects of economic precarity during childhood are well documented. Children raised in poverty are more likely to experience premature mortality, compromised safety and security, as observed by increased rates of involvement with child protective services (CPS) and placement into foster care, as well as diminished health and human capital over their life course. A burgeoning evidence base points to several key policy levers for ameliorating these effects, however evidence of direct impacts over the course of children’s lives is relatively thin. This panel seeks to address this gap in the literature by examining the ways in which expanding these key policies - namely raising the minimum wage and expanding the access and generosity of tax credits - meaningfully improves children’s lives into adulthood. 

The first paper investigates the effects of the Fair Labor Standards Act of 1966 that raised the wage floor, having an outsized effect on Black and historically excluded workers. Results indicate that a one-percentage-point increase in employment covered by the minimum wage reduced the infant mortality gap between Black and white infants by about 0.16 deaths per 1,000 births, or 1.2% of the mean gap.

The second paper considers the impacts of cash received via the expanded child tax credit on an array of child wellbeing outcomes, including safety (measured using CPS involvement and injuries) and mortality. The authors investigate the role of parental impacts as mechanisms for improvement, providing insight into adverse and protective effects linked to adulthood inequality. 

The third paper in this panel asks whether exposure to the EITC - a work-conditioned tax credit - affects children’s wealth accumulation into adulthood. Through increased savings and plausible improvements in productivity and skill via enhanced child investments, findings suggest that the EITC leads to sizable, long-term improvements in wealth. 

The fourth paper in this panel examines parallel outcomes regarding the child tax credit, asking whether the additional income respectively improves intergenerational mobility. Using a novel, linked intergenerational sample of tax records, preliminary results echo the results in papers one through three, finding sizable effects on economic mobility.

Policy Area

• Family and Child Policy

Chair

• Leslie Hodges, USDA - Economic Research Service

Discussants

• Katherine Rittenhouse, University of Texas at Austin

• Georgina Maku Cobla, Georgia Institute of Technology

Organizer

• Kate Musen, Cornell University

Individual Presentations

• Minimum Wages and Racial Infant Health Inequality: Evidence from the Fair Labor Standards Act of 1966 - Presenting Author: Kate Musen, Cornell University

• Tax Credits and Child Safety: Evidence from Wisconsin - Presenting Author: Jessica Erin Pac, University of Wisconsin-Madison

• The Long-term Impact of the EITC Exposure in Childhood on Individual’s Wealth Trajectory in Adulthood - Presenting Author: Shuyi Qiu, Duke University

• The Child Tax Credit and Intergenerational Mobility: Evidence from Administrative Tax Records - Presenting Author: Katie M Jajtner, Internal Revenue Servcie