Child Benefits in the U.S. Federal Income Tax

This paper examines changes in, and interactions between, the major components of the U.S. federal tax code that provide substantial child benefits, including stimulus payments that depend on children. The focus is on creating a measure of total child tax benefit by income level, tax filing status, number of children, and year. From this measure, we learn that child tax benefits have more than doubled in real terms since the early 1990s and that low-income families receive larger child tax benefits than high income families for a first or second child, while the reverse is true for a third or fourth child. This paper also provides a case study of a tax policy change that lacked the intended consequences due to interactions between the child-benefit components of the tax code. Finally, this paper considers a comparison of child tax benefits to estimates of the cost of raising children.

The Efficiency Cost of Child Tax Benefits

Families with children receive preferential treatment in the U.S. federal income tax. Over the past 15 years, the real value of child tax benefits approximately doubled reaching nearly $1,900 per child in 2006. This paper examines the efficiency cost of providing child tax benefits. A representative agent model is used to show how the efficiency cost of providing child tax benefits depends on labor supply and fertility elasticities. The model reveals that cross-price substitution effect for labor supply and children is of primary importance in calculating the efficiency cost. However, there are no estimates of this parameter in the literature. This paper uses data from the National Longitudinal Survey of Youth (NLSY) to estimate this parameter. The estimated cross-price substitution effect implies that children and time spent outside of employment are complements. This implies that the full cost of providing child tax benefits is larger than the reported tax expenditure.fertility, income tax, child tax benefits, female labor supply

Fertility Response to the Tax Treatment of Children

One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm, and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of recent increases in child tax benefits by replicating this earlier study and extending the analysis with an additional 20 years of data. We find that their results suffer from the spurious regression problem, and are not robust to differencing. We find evidence of a statistically significant fertility response to a change in the real value of child tax subsidies occurring with a one- to two-year lag, but a much smaller and statistically insignificant total effect after several years, suggesting that a change in the child tax subsidy most strongly affects the timing of births.fertility, income taxation, child tax benefits, personal exemption

Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market Boom and Bust

While there is a great deal of literature focusing on the relationship between income and fertility, little is known about how wealth affects fertility decisions of the household. This paper fills this gap in the literature by investigating how changes in housing wealth affect fertility. In particular, we use the wealth variation supplied by the recent housing boom and bust to generate exogenous variation in household wealth. We first conduct a state-level aggregate analysis to investigate how the birth rate is related to housing prices using differences in the timing and size of the housing market boom and bust across different states over time. We then conduct an analysis using restricted-use data from the Panel Study of Income Dynamics that allows us to track how women’s fertility behavior is related to individual-level housing price growth. The demographic and geographic controls in the PSID allow us to control extensively for any confounding effects driven by household selection across different cities or neighborhoods, and we find that for homeowners, a $10,000 increase in real housing wealth causes a 0.07 percent increase in fertility. We find little effects of MSA-level housing price growth on the fertility of renters, which supports our identification strategy. That increases in housing wealth are strongly associated with increases in fertility is consistent with some recent work showing a positive income effect on births, and our estimates are suggestive that the large recent variation in the housing market could have sizeable demographic effects that are driven by the positive effect of housing wealth on fertility.

How Costly is Welfare Stigma? Separating Psychological Costs from Time Costs

This paper empirically decomposes the costs of welfare participation using a model of labor supply and participation in multiple welfare programs. Prior estimates of the cost of welfare participation have not differentiated psychological costs, or stigma, from the effort required to become eligible and maintain eligibility (time costs). The relative size of these two costs has implications for policy. We find that psychological costs are at least as large as the time costs associated with participation in food assistance programs. In addition, we find that the incidence of psychological costs is inconsistent with these costs acting as an effective screening mechanism.Program Participation, Welfare Stigma, Labor Supply, Structural Estimation

Impurity in a bosonic Josephson junction: swallowtail loops, chaos, self-trapping and the poor man's Dicke model

We study a model describing $N$ identical bosonic atoms trapped in a double-well potential together with a single impurity atom, comparing and contrasting it throughout with the Dicke model. As the boson-impurity coupling strength is varied, there is a symmetry-breaking pitchfork bifurcation which is analogous to the quantum phase transition occurring in the Dicke model. Through stability analysis around the bifurcation point, we show that the critical value of the coupling strength has the same dependence on the parameters as the critical coupling value in the Dicke model. We also show that, like the Dicke model, the mean-field dynamics go from being regular to chaotic above the bifurcation and macroscopic excitations of the bosons are observed. Overall, the boson-impurity system behaves like a poor man's version of the Dicke model.Comment: 17 pages, 16 figure

Dicke-type phase transition in a multimode optomechanical system

We consider the "membrane in the middle" optomechanical model consisting of a laser pumped cavity which is divided in two by a flexible membrane that is partially transmissive to light and subject to radiation pressure. Steady state solutions at the mean-field level reveal that there is a critical strength of the light-membrane coupling above which there is a symmetry breaking bifurcation where the membrane spontaneously acquires a displacement either to the left or the right. This bifurcation bears many of the signatures of a second order phase transition and we compare and contrast it with that found in the Dicke model. In particular, by studying limiting cases and deriving dynamical critical exponents using the fidelity susceptibility method, we argue that the two models share very similar critical behaviour. For example, the obtained critical exponents indicate that they fall within the same universality class. Away from the critical regime we identify, however, some discrepancies between the two models. Our results are discussed in terms of experimentally relevant parameters and we evaluate the prospects for realizing Dicke-type physics in these systems.Comment: 14 pages, 6 figure

Meissner effect in Fock space

By periodically driving a single bosonic Josephson junction (BJJ) with an impurity, a synthetic gauge field is generated in the Fock space of the system. At a critical synthetic gauge flux the ground state undergoes a quantum phase transition which is analogous to the Meissner-Abrikosov-vortex transition found in type-II superconductors with an applied magnetic field. A second quantum phase transition involving attractive interactions between the bosons of the BJJ is shown to enhance the sensitivity of the system to the Meissner-Abrikosov-vortex transition.Comment: 8 pages, 4 figure

Two-particle topological Thouless spin pump

We show that two particles interacting via spin exchange exhibit topological features found in one-dimensional single particle lattice models. This is accomplished by absorbing all of the spatial degrees of freedom of the lattices into the spin degrees of freedom of the two particles. Comparing the spin system with the Su-Schrieffer-Heeger model, we show the existence of topologically protected edge spin states and establish the bulk-edge correspondence. Modifying the spin system with a chiral symmetry breaking term results in it resembling the Rice-Mele model and can therefore act as a Thouless spin pump of one of the particles when periodically and adiabatically driven. By using the spin states as a synthetic spatial dimension, we show two particles are enough to simulate well known topological properties in condensed matter physics.Comment: 8 pages, 5 figure