Research Shows How BBB Act Could Improve Family Benefits to Better Buffer Family Economic Instability

December 14, 2021

Contact: Karen Conner, 202-281-4159

Washington DC — When a family lives paycheck-to-paycheck they are vulnerable to income “shocks” caused by unstable or unreliable work hours. Food, housing, and other family benefits that can help stabilize families when income is precarious are part of the Build Back Better (BBB) Act now being debated in Congress.

This new article, published today by the Center for Economic and Policy Research (CEPR), examines the past effectiveness of three types of family benefit programs when it comes to buffering families from unstable or unreliable work hours, especially among Black and Hispanic children. Measuring past effectiveness of in-kind benefits, cash benefits, and annual lump sum tax credits will help gauge the effectiveness of policies in the proposed and final BBB Act.

CEPR researchers Julie Cai and Algernon Austin find that, in the past:

Black children experienced about 40 percent higher caregiver work hour instability, on average, than their white counterparts. For Hispanic children, it was about 18 percent higher.
In-kind programs provide greater buffering to Black children. Among Black children, 54 percent of the income decline associated with a 10 percent increase in work hour instability is offset by in-kind transfers. This is more than twice the effect that cash benefits make.
For Hispanic children, in-kind programs’ mitigating effect is nearly twice as large as cash transfers, but the tax system appears to be less effective in further protecting them from household income decline due to work hour instability.

To reduce both poverty and month-to-month income and earnings volatility among families with children, the United States should adopt a universal child allowance that provides a monthly per-child benefit to all families in a way that minimizes administrative burdens and stigma, universal childcare assistance, and expanded housing assistance so that all currently eligible families actually get it. The Senate should strengthen all three of these important provisions when it takes up the BBB Act later this month.