Making ends meet has become much harder for American families. Decades of stagnating wages have left the typical worker unable to attain middle-class security. Nearly half of parenting-age Americans report having fewer children than they want, with affordability cited as the top obstacle. The economic challenge is compounded by a biological one: Parents must start families early in their working lives, before they have had the opportunity to save, and the arrival of children simultaneously raises costs and reduces income.

Many proposals focus on expanding paid leave and childcare, on the assumption that both parents can and should be in the workforce. But these benefits are valuable only if both parents work, targeting only that family arrangement for support and creating a strong incentive to adopt it. Most families prefer a different arrangement—in particular, having a parent at home with young children. Public policy should leave that choice to the parents.

The United States should create a social insurance program that helps parents afford the cost of raising kids. The program should begin during pregnancy and continue until children reach the age of 18, providing families with $350 per month until a child reaches the age of six and $250 per month thereafter. Through the taxes they pay, households without children would help to support those that have them, and parents who are successful in their own careers will go on to repay the support they received and help to support those less fortunate as well. While some child allowance proposals call for unconditional payments to all families, an effective social insurance program should preserve an expectation that families are also working to support themselves. A household should only be eligible to receive payments up to the total level of income it earned the previous year. This look-back limit would target the program to working families, give someone who has lost a job time to find a new one, and ensure that even a very-low-income household—for instance, a single parent working part-time at the minimum wage—could receive the full benefit.