Universal child benefits: Policy issues and options


Report motivation and objectives

This report critically reviews the case for universal child benefits (UCBs). It seeks to contribute to a burgeoning and lively debate on the (potential) role of UCBs as a policy instrument in the pursuit of child poverty reduction and universal social protection.

Universalism has come to the fore in policy circles with the Agenda 2030 and the related Sustainable Development Goals – and their underlying aspiration to ‘leave no one behind’ (UNGA, 2015). In this agenda, social protection emerges as one of the main tools at governments’ disposal for progressing towards these goals. In this vein, interest in and experiments with a universal basic income (UBI) are also gaining traction. Over the last decade, however, universalism has been under threat, with a review indicating that 107 governments were considering rationalising and more narrowly targeting their safety nets (Ortiz et al., 2015).

Children are one of the population groups at highest risk of exclusion from social protection. In terms of aggregate global estimates, population coverage for child and family benefits remains low, at around 35% (ILO, 2017). Countries spend an average 2.4% of their gross domestic product (GDP) on social protection for older persons, compared with 0.3% for children (ibid.).

At the same time, child poverty remains high, with uneven progress in poverty reduction across countries, and persistent over-representation of children in poverty compared with older age groups (UNICEF, 2016; Alkire et al., 2017). A staggering 385 million children, or one in five, are still struggling to survive on less than $1.90 a day (purchasing power parity, PPP), and children are more than twice as likely to be living in extreme income poverty as adults (World Bank, 2018a). Poverty is about more than income, and 689 million children are estimated to be living in multidimensionally poor households, again with poverty rates consistently higher than adults (Alkire et al. 2017).

Efforts to tackle child poverty and address the policy imbalance in social protection over the last two decades have included the adoption of social assistance cash transfers across low- and middleincome countries as central elements of their poverty reduction and social protection strategies. Elsewhere, established child benefits, including UCBs, are a cornerstone of national welfare systems. At the time of writing, out of 180 countries for which information is available, 108 (60%) have some type of child or family benefit anchored in national legislation (ILO/UNICEF, 2019).

These trends have been accompanied by a growing body of evidence on the effectiveness of social protection in promoting children’s and wider social outcomes. Recent cash transfer reviews underscore how – if appropriately designed and as part of wider social policy – they can significantly impact both children’s intermediate outcomes, such as expenditure on children’s goods, school attendance and access to healthcare, and final outcomes, such as cognitive development and health (e.g. Cooper and Stewart, 2013; Bastagli et al., 2016). Critical to determining these impacts are benefit design and implementation details, including child population coverage, transfer values, regularity of payment, and links with complementary services and wider social policy provision.

Against this backdrop, the under-coverage or lack of social protection for children emerges as a key policy priority. This report examines the role of UCBs in making progress towards addressing these gaps. In particular, it asks: What are the benefits and limitations of UCBs against other types of child benefits? What are the key issues and trade-offs? What are the policy options moving forward?

The report has three main objectives:

  • to provide a picture of policy in practice, reviewing the variety of policy options and processes of realisation, with a focus on cash transfers for children of a universal and unconditional nature
  • to critically review the arguments and the evidence on child benefit design and implementation options and related tensions or trade-offs
  • to provide guidance on the issues governments need to consider when embarking on policy decisions regarding benefits for children and options moving forward.