A Plan to Reduce Poverty for Families

Published: https://www.povertycenter.columbia.edu/publication/case-for-federal-birth-grant

Date: February 22nd, 2023

Many families experience significant declines in economic stability around the time of the arrival of a newborn due to increased spending related to preparing for and caring for an infant, as well as any loss of income during that period. Most wealthy, industrialized countries provide a “birth grant”—benefits or payments to parents of newborns to assist with parental and newborn expenses, which can be delivered at birth or prenatally. The United States, however, stands out among peer countries in its lack of support for newborn children and their families, which results in increased poverty and income inadequacy around the time of childbirth.

In this brief, we introduce the idea of a birth grant in the United States, and provide evidence on how such a birth grant can reduce the heightened poverty surrounding a birth. In addition, we show how a birth grant can be coupled with a monthly child allowance to further reduce infants' and families' poverty across the first year of life.

Summary & Key Findings

• In the United States, the birth of a child increases the likelihood of poverty by 33%, with over 1 out of 4 mothers experiencing poverty in the month after birth. Spikes in poverty following a birth are particularly pronounced for Black and Latina mothers.

• In addition to paid family leave, many countries also offer additional one-time cash assistance through a ‘birth grant’ to support families in this critical time. The United States currently offers neither.
• If the United States delivered a birth grant to mothers, the potential anti-poverty effects would be striking: a one-time $1,800 birth grant would nearly eradicate poverty in the month of birth (reducing the poverty rate from 25.5 % to 2.4% of mothers of newborns).
• If a one-time birth grant was coupled with a monthly child allowance, poverty in the month of birth would be almost eliminated and poverty among mothers would be kept consistently lower throughout the first year of the child’s life.

Read Policy Brief here.