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1 1 (December 16, 2021)

handle is hein.amenin/aeiaefe0001 and id is 1 raw text is: M\d a National Ac\\adem.y of Sci\.ences.. Committee on, Poverty Reducti.\on Ov\.ette the Benef ts and Understate the Costs o a CHId .A c ? Scott Winship, Senior Fellow and Director of Poverty Studies American Enterprise Institute December 16, 2021 The American Rescue Plan Act, signed into law in March of this year, created the most ambitious antipoverty policy since Lyndon Johnson's Great Society. The law authorized a one-year expansion of the child tax credit into a nearly universal child allowance, providing a per-child benefit to all but the richest families, without regard to their tax liability or income. As of this writing, Democrats are seeking to make the child allowance permanent through a multi-trillion-dollar budget bill pending in the Senate. Throughout the year, _,rn r and other advcc tcs of the child allowance have appealed to the importance of evidence-based policymaking, citing the 2019 report of a National Academy of Sciences (NAS) committee charged with determining how to cut child poverty in half within ten years. The panel ran a number of policy simulations to assess different proposals and determined that a child allowance was the most effective solution. The child allowance has been controversial, in part, because of concerns that it might reduce employment, increase single parenthood, or both. These kinds of unintended consequences would limit the extent to which giving money to families will reduce poverty, especially in the long run. Avoc es of a child allowance have responded that the NAS report should allay these fears. The best evidence, according the report, suggests that any effects from these unintended consequences would be negligible. But in an explosive working paper published in October, a team of University of Chicago economists, led by Bruce Meyer and Kevin Corinth, argued that the NAS panel ignored the most important way that the new child allowance would be expected to reduce work. In the weeks since, it has become even clearer that the NAS panel made a serious error, understating dramatically the extent to which changing the old child tax credit to a child allowance is likely to reduce work, and thereby overstating its long-term poverty reduction impact. As Congress continues to debate the child allowance, a commitment to evidence-based policymaking requires that NAS take the Meyer-Corinth charges seriously and that the panel correct and revise its analyses. The NAS Report's Child Allowance and Today's The .Ns S rgrt evaluated a range of reforms by simulating the additional income that each would provide families with children. Providing families with additional income might cause them to change their behavior in various ways, which can have second-order effects on poverty. For instance, if families respond to additional benefits by working fewer hours, the policy will have a smaller impact on poverty than it would if no one reduced their work. The NAS panel incorporated behavioral effects in their 1

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