Whether facing additional expenses or being crushed under mounting bills, families with young children can often rely on income support via public programs like child benefits. Widespread worldwide, child benefits are typically universal and unconditional, meaning that caregivers can access them without being tasked with work or other burdensome requirements. Decades of research show that this policy approach lifts households out of poverty and gives children a better and more equitable chance of thriving early on and later in life.
Yet the design of child benefits has also changed over time. In Europe, many such programs have been around for more than eighty years. Families with multiple children used to be the sole target of these policies. Later, they remained eligible for higher sums after support was expanded to families with one child. In the 1990s and again after the Great Recession, however, support for larger families was cut all across Europe. Citing government budgets as a concern, it was argued that families with more than one child should be doing “more with less”. This claim has not received enough scientific attention, especially when it comes to the consequences of cuts in the long run.
The Dutch government was a pioneer when, in 1994, it abolished the child benefit "top-ups" that increased payments upon the birth of a second or subsequent child. This policy took effect for children born on or after January 1, 1995.
Based on population-wide and survey data, a new study by Gabriele Mari (Erasmus University Rotterdam) compares the life chances of children born just before and just after that date, a lottery of sorts induced by the policy change. The reform seems to have had little impact on children’s education and health when considering all households receiving child benefits. Yet findings also show that children born in less well-off households after the reform had lower chances to complete the academic track of secondary school and have lower earnings now that they have entered the labour market. Their parents were more likely to fall into poverty under the new policy, thereby limiting their expenses on children’s books, clothes, and daycare. Child care, then, fell even more on mothers, who were pushed to reduce their own employment and earned less in the long run.
Notably, the Dutch reform imposed a smaller cutback compared to some of its modern counterparts, like the two-child limit introduced in the UK in 2017. Findings in this study suggest that such policies may force larger families to make sacrifices that impinge on the well-being of children and their caregivers. Child poverty and its consequences, often starker for families with more than one child, are thus policy choices, and social security could be enhanced by providing more generous and proportional income support.