What is a family allowance program? Discuss the shortcomings of this program
What will be an ideal response?
Under a family allowance program, the government pays each family a set amount based on the number of children in the household. If payments were large enough, a program like this could aid in eliminating poverty, particularly in large families.
There are some strong criticisms of family allowance plans. If payments were made to all children, the program would be very expensive and much of the money would go to nonpoor families. This problem could be solved by varying the family allowance payments with income and terminating payments after a certain income is reached. However, such an approach would then involve a means test and continue to stigmatize recipients. A second criticism is that such a program would provide an incentive to increase the birthrate at a time when overpopulation is a major concern. A final criticism is that it would not provide payments to single individuals and childless couples who are poor.
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