On March 17, 2022, Elizabeth Ananat, Barnard’s Mallya Professor of Women and Economics, co-authored a paper that was published by the National Bureau of Economic Research. For this new article, titled “The Benefits and Costs of a U.S. Child Allowance,” Ananat and her co-authors conducted a benefit-cost analysis of a U.S. child allowance, which included examining the short- and long-term effects of cash and near-cash transfers.
The researchers produced core estimates of the benefits and costs per child and per adult associated with increasing household income by $1,000 per year and then applied these estimates using microsimulation to determine the net aggregate results of three child allowance policies. Their results indicate that a permanent expansion “would cost $97 billion per year and generate social benefits with net present value of $982 billion per year." This strongly suggests that making the enhanced child tax credit permanent would produce high net returns for the U.S. population.