Effect of Child Benefit Payments on Child Outcome Expenditures in South Korea

Extensive research has shown the positive impact of conditional child benefits on child outcomes. However, there is limited work on the impact of universal child benefit payments on how families spend on child outcomes. Our study explores this issue. This study examined the relationship between child benefit payments on child outcome expenditures using longitudinal data from the Korean National Survey of Tax and Benefit (N=3681 households) and a household- and year-fixed effects regression model. We found that child benefit payments are positively associated with child outcome expenditures across family income groups. Furthermore, the analysis results suggest that compared to high-income family groups, low- and middle-income family groups increase spending on child outcome expenditures in response to child benefit payments. Finally, the policy implications of this are discussed.