Public Investments and Class Gaps in Parents' Developmental Expenditures

Baby bump? Birth month, family income, and early childhood development

Federal and state laws in the U.S. provide families with babies born just before the end of the year with thousands of dollars in tax savings. Because this income windfall is realized during the first few months of a newborn's life, we assess whether babies born in December experience developmental advantages in early childhood compared to those born right after the New Year. Using data from the Child Development Supplement of the Panel Study of Income Dynamics and the Children of the National Longitudinal Survey of Youth, we implement a regression discontinuity design that exploits variation in birth timing. We first illustrate that the tax savings received by families with end of year babies are substantial. We then show that while children born in December have a weight disadvantage at birth compared to those born in January, they have an average weight-gain advantage of between 0.7 and 1.5 pounds (0.08-0.17 standard deviations) during subsequent follow-up interviews. We also find that end-of-year babies reach early developmental milestones faster, but exhibit no advantage in memory, word recognition, or applied problem solving. This end-of-year birth developmental advantage is consistent with the identified tax savings from end-of-year births.

Pricing the priceless childcare: Early childhood education for babies and toddlers

This article connects Viviana Zelizer's theory of the social meaning of money to family studies, using the case of American parents' spending on children. We investigate how money spent on the youngest children-babies and toddlers-reflects the growing expert emphasis on the importance of parental investment in the critical early period for child development. First, we review literature on expert knowledge to trace the shift in increasing emphasis on the importance of building children's cognitive skills through formal education beginning in infancy, offered in center-based care, moving from spaces of "childcare" to "early childhood education" centers. Second, we use quantitative data from the Consumer Expenditure Survey (1995-2017) to show that parents have increasingly spent money, and an increasing share of their income, on center-based care for babies and toddlers but not on other child items. Additionally, lower income families have been spending a greater share of their income on center-based care for their infants than other families. We interpret our findings using Zelizer's theory about the cultural influences on the meaning of money, showing how these can be expert-led and persist even when families are faced with structural economic constraints.

State-Level Safety Net Spending and Educational Gaps in Maternal Time with Children

Objective

We examine how state spending on children is associated with the size of socioeconomic gaps in maternal childcare time.

Background

Persistent socioeconomic divides in the amount and nature of parental time with children have prompted consideration of the factors that mitigate inequalities within the family. At both the national and local levels, the welfare state plays an important role in structuring opportunities for children. Thus it is important to understand the institutional factors that shape parental behavior. Yet, little research examines how the social safety net is associated with family processes.

Method

Using rich data on maternal time with children from the American Time Use Surveys (2003-2016), combined with longitudinal data on public spending in states on major programs affecting children and families, we examine how state spending on children is associated with the size of socioeconomic gaps in maternal childcare time.

Results

We found that higher levels of state spending were associated with significant increases in childcare time among low-educated mothers at both the extensive and intensive margin, increasing the likelihood of spending any minutes on primary childcare in a typical day, as well as increasing the number of minutes spent on childcare. In contrast, we observed no variation in the behavior of highly-educated mothers as state spending changes.

Implications

State-level investments could meaningfully narrow socioeconomic gaps in maternal time with children.

Family, Community, and the Rural Social Mobility Advantage

Children born into poverty in rural America achieve higher average income levels as adults than their urban peers. As economic opportunity tends to be more abundant in cities, this "rural advantage" in income mobility seems paradoxical. This article resolves this puzzle by applying multilevel analysis to new spatial measures of rurality and place-level data on intergenerational income mobility. We show that the high level of rural income mobility is principally driven by boys of rural-origin, who are more likely than their urban peers to grow up in communities with a predominance of two-parent households. The rural advantage is most pronounced among Whites and Hispanics, as well as those who were raised in the middle of the country. However, these dynamics are more nuanced for girls. In fact, girls from lower-income rural households exhibit a disadvantage in their personal income attainment, partly due to the persistence of traditional gender norms. These findings underscore the importance of communities with strong household and community supports in facilitating later-life income mobility, particularly for boys. They also challenge the emerging consensus that attributes the rural income mobility advantage to migration from poorer rural areas to wealthier towns and cities.

Taxing reproduction: the full transfer cost of rearing children in Europe

What are the intergenerational resource transfer contributions of parents and non-parents in Europe? Using National Transfer Accounts and National Time Transfer Accounts for 12 countries around 2010, we go beyond public transfers (net taxes) to also value two statistically much less visible transfers in the family realm: of market goods and of unpaid household labour (time). Non-parents contribute almost exclusively to public transfers. But parents additionally provide still larger private transfers: mothers mainly time, fathers mainly market goods. Estimating transfer stocks over the working life, the average parental/non-parental contribution ratio in Europe flips from 0.73 (public transfers alone) to 2.66 (all three transfers combined). The highest combined parental/non-parental contribution ratios are in Sweden and Finland. The metaphorical tax rates implicitly imposed thereby on rearing children in Europe are multiples of the value-added tax rates in place on consumption goods. Unveiling the sheer magnitude of these invisible transfer asymmetries carries multiple implications for policy debates. For instance, it raises the question whether ageing European societies unwittingly tax, rather than subsidise, their own reproduction. Family friendly policy models, such as the Nordic welfare states, do not mitigate this effect. They help parents work, but do not lower the implicit tax parents pay.

Income Support Policy Packages and Birth Outcomes in U.S. States: An Ecological Analysis

Research suggests that generous social welfare programs play a role in maternal and child health. However, most studies examine a single policy in isolation. Drawing from research documenting low-income families 'packaging' of social policies, we create a novel measure summarizing the value of a collection of income support policies for the working poor. This collection includes: the Supplemental Nutrition Assistance Program (SNAP), the Earned Income Tax Credit (EITC), the minimum wage, and the unemployment insurance (UI) program. Using U.S. state-level administrative data from 1996 to 2014, we estimate fixed effects regression models to examine the relationship between birth outcomes and income support policies (individually and combined). We find that increases in the combined value of the four income supports are significantly associated with reductions in preterm births and low birthweight births, but not infant mortality rates. States with the highest observed levels of combined income support had 14% fewer PTBs and 7% fewer LBWs than states with the lowest levels of income support. Of the four individual income support policies, only unemployment insurance has no significant independent effects. SNAP benefits have the largest and most consistent effects, reducing poor birth outcomes across all three indicators. An annual increase of $1000 in SNAP benefits is associated with a 3% decline in infant deaths, 5% decline in preterm births, and 2% decline in low birthweight births. These results suggest that increasing the generosity of income support policies may be a promising strategy for improving birth outcomes in the United States.

Do high-income households 'label' family cash benefits? Evidence on family expenditures from Australia

This study examines family expenditures and how they respond to the provision of family cash transfers, particularly among higher-income families. Naming cash benefits with explicit reference to 'families' or 'children' can nudge households into labelling the extra cash for financial investments in children. Labelling has mainly been assessed among lower-income families. Yet if also higher-income families engage in labelling, there could be unintended consequences on the often stark disparities in child-related investments across the socio-economic divide. Drawing on 2006-2019 data from Household, Income, and Labour Dynamics in Australia (HILDA), the study relies on reforms to Australia's Family Tax Benefit to 'reveal' expenditure responses among higher-income families via an instrumented difference-in-differences design. Higher-income households seem to earmark a family cash transfer for children's clothing but not for children's education fees, while they also assign money to adult clothing. Lower-income households, differently, seem to engage in more clear-cut, child-oriented labelling, at the expense of adult-assignable goods. Family cash transfers can nudge households into spending more money on their children across the socioeconomic divide, but not necessarily homogeneously so. Providing more well-off families with modest transfers might thus have limited perverse effects on inequality in family expenditures.

Social Spending and Educational Gaps in Infant Health in the United States, 1998-2017

Recent expansions of child tax, food assistance, and health insurance programs have made American families' need for a robust social safety net highly evident, while researchers and policymakers continue to debate the best way to support families via the welfare state. How much do children-and which children-benefit from social spending? Using the State-by-State Spending on Kids Dataset, linked to National Vital Statistics System birth data from 1998 to 2017, we examine how state-level child spending affects infant health across maternal education groups. We find that social spending has benefits for both low birth weight and preterm birth rates, especially among babies born to mothers with less than a high school education. The stronger benefits of social spending among lower educated families lead to meaningful declines in educational gaps in infant health as social spending increases. Our findings are consistent with the idea that a strong local welfare state benefits infant health and increases equality of opportunity, and that spending on nonhealth programs is equally beneficial for infant health as investments in health programs.