Published on June 18, 2021
This essay is part of a RealClearPolicy series centered on the American Project, an initiative of the Pepperdine School of Public Policy. The project looks to the country’s founding principles to respond to our current cultural and political upheaval.
This year has seen no shortage of plans to give families a financial boost, and the proposals have come from all sides of the political spectrum. The Biden administration’s American Rescue Plan directs the IRS to begin sending parents $3,000 per child, with checks scheduled to start flowing next month. Sen. Mitt Romney (R-UT) has proposed a universal child benefit that would improve on the Biden administration’s plan by consolidating it with some other tax code provisions. Sen. Josh Hawley (R-MO) introduced a bill that would provide $1,000 a month to households with children at home, so long as the parents meet a modest work requirement.
These plans have sparked lively discussions across the Right, especially given concerns about the record-low birth rates during the pandemic-stricken year of 2020. To some extent, these low birth rates were to be expected: Pandemics and the associated economic distress are generally linked to lower fertility. But part of what makes these trends worrisome is that they predate COVID-19. Even in 2019 — one of the strongest economic years in recent history — birth rates were already showing a marked downward trajectory. Yes, Covid caused a baby bust; but we were heading in that direction anyway.
Declining birth rates have sparked a renewed interest in “family policy” among conservatives, which is welcome. But arguments about child benefits and payments to families often attribute more power to public policy than it can bear. Conservatives interested in supporting the family through tax policy should do so with eyes open to its limitations.
Of course, conservatives have long advocated policies that aim to shore up families against the cultural tides that erode the bonds of marriage and parenthood. After all, as the American Project at the Pepperdine School of Public Policy has noted, strong families are essential to a flourishing society. In the words of Daniel Patrick Moynihan, “the family is the basic social unit of American life” — when it is weakened, the other institutions of civil society falter as well. To face today’s challenges, however, some on the Right have begun arguing for a robust economic agenda, including generous child benefits, as a solution to falling fertility rates.
For instance, Sen. Hawley defends his bill on the grounds that “starting a family and raising children should not be a privilege only reserved for the wealthy.” In a column for the New York Times, the populist writer Chris Buskirk argued “government policy that directly supports children and family life is not just beneficial, but essential to the health, vitality and sustainability of the nation.”
However, evidence from abroad strongly suggests that, in general, child benefits do not move the needle that much on fertility. There are a few standout examples, such as Russia’s Maternity Capital campaign, which increased short-run birth rates by about 10 percent. But, notably, this subsidy boosted birth rates most in area with a high cost of living, suggesting that housing costs, in particular, may be a primary factor in declining birth rates. This example also suggests that, unless we are willing to spend on the order of tens of thousands of dollars per new child — considerably more than any of the U.S. proposals currently on the table — we should not expect to see anything like that kind of baby bump here.
Where a Biden- or Romney-style child benefit could make a difference for fertility is on the margins — for the single mom facing an unexpected pregnancy or the parents who would love a third child but are unsure whether they can afford another mouth to feed. Pro-life conservatives should keep in mind that women who have abortions mention financial concerns 40 percent of the time when explaining the reasons for their choice.
Yet, even if a robust child benefit regime had no significant impact on our nation’s fertility rate — a very real possibility — that would not undermine what is, in fact, the best conservative case for a child allowance: Parents directly bear the real expenses and opportunity costs of raising children, and society should compensate them for their effort.
As childlessness becomes more common, the costs of bearing and rearing the next generation will become concentrated on a small number of households. (Our entitlement programs, for example, rely on tomorrow’s generations to pay current retirees’ benefits, a social contract that breaks down if there are not enough future workers.) Conservatives should recognize that compensating parents for the benefits society reaps from their work on the home front is not just a question of prudence, but fairness. To put it in economic terms, society is “capturing” a share of parents’ labor that exceeds the return that the parents themselves get back. Academics call this a “positive externality.” We might call it a free lunch.
Note that this rationale for a child benefit does not require one to buy the argument that finances are the key factor preventing people from having children. The strongest explanations for why fertility has fallen do not strictly have to with finances, but with opportunity costs and shifting cultural expectations. These factors, of course, have different impacts on households at different points along the socioeconomic spectrum.
For college-educated parents with high incomes, for instance, the “costs” of having children are not simply the associated expenses, but the opportunities forgone. As educational attainment has increased, especially for women, the hit to income and career advancement by taking time out of the labor force to raise children has also increased. For college educated moms and dads trying to balance careers and family life — or those upper-income young adults who hope to one day become parents — child benefits are not likely to be as helpful as more flexible hours, work-from-home opportunities, and paid leave.
By contrast, for many working- and middle-class parents, hesitations around parenthood have less to do with career concerns and more to do with the reality that providing for a child requires a level of resources they simply may not have. While the actual cost of raising a child may not have increased that much over time, the culturally expected cost of parenthood has soared. For parents in these circumstances, a regular child benefit would be likely to make more of a difference.
By itself, a universal child benefit will not address the deeper cultural challenges families face today. But this policy would ratify parenthood as a social good that is more than just a lifestyle choice. And that could have knock-on effects later on. A universal benefit, even for parents who do not strictly need it on financial grounds, would demonstrate a commitment to putting families at the center of our social and political life.
Yet, some conservatives who are concerned about family affordability worry that child benefit proposals violate the principle of subsidiarity. Many conservatives rightly prize subsidiarity, which is derived from Catholic Social Teaching, and holds that political decisions should be devolved to the lowest appropriate level of authority. The worry is that a permanent child benefit would violate this principle by asking the federal government — rather than states, local governments, communities, or families themselves — to make decisions about family life.
These concerns are sincere and well intentioned, but misplaced. A child benefit is, in fact, a way to support families that strengthens them as an economic unit, rather than relying on a Great Society-like alphabet soup of programs. Conversely, one could imagine a system of backdoor tax credits aimed at reducing the expenses associated with child rearing, from diapers and school supplies to child care and extra-curricular activities. But these would be more administratively complex and more economically distortive than just giving parents a straight cash transfer to spend on whatever their children require without strings attached. (The current child care tax credit, for example, assumes parents will have formal child care expenses rather than a relative or neighbor, restricting families’ flexibility.)
In short, a universal child benefit, like Social Security benefits, provides an appropriate bang for our public buck without unduly influencing parents’ preferences, respecting parents as the appropriate authority for what would benefit their lives.
Conservative family policy should not be undertaken under false pretenses. America’s decreasing fertility rates cannot be solved overnight, and are unlikely to be addressed even with a muscular application of federal spending power. But a conservative family policy should not be simply about pro-natalism anyway. Rather, it should be about supporting families as the core building block of a flourishing society — and recognizing the work parents put into rearing the next generation.
Recognizing such a rationale for compensating parents fits squarely within a conservative understanding of the role of government — and provides a compelling reason to adopt broad-based child benefits as part of a communitarian governing agenda.
Patrick T. Brown is a fellow at the Ethics and Public Policy Center and was formerly a senior policy advisor for Congress’ Joint Economic Committee.