Less for more? Cuts to child benefits, family adjustments, and long-run child outcomes in larger families in Netherlands

By Gabriele Mari, Erasmus University Rotterdam (The Netherlands)

Previous studies have examined how cash transfers affect children’s education and health regardless of sibship size. I examine the long-run consequences of a Dutch reform that gradually curtailed child-benefit payments for larger families.

Based on administrative data and a regression discontinuity design, I find little evidence of average reform effects on children’s education and mental health. However, children in less well-off households exposed to the reform experience long-lasting educational penalties.

Analyses of survey and admin data suggest that, if not for the reform, households would have relied more on centre-based care as opposed to maternal care. Lower parental investments in child-related goods and a more stressful environment accompanied heightened poverty risks after the reform.

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