Burden or Investment: A Fiscal Policy Analysis of the Child Allowance for Newborns

Abstract

This academic article aims to analyze the fiscal dimensions of Thailand’s child allowance policy by employing the conceptual framework of welfare economics and public finance functions. The study examines budgetary trends and the number of beneficiaries from the program’s inception in 2015 to 2025. Findings indicate that although the program has expanded its coverage and the number of recipients has steadily increased, the allowance of 600 baht per month remains significantly below the minimum cost required for adequate child-rearing (1,897-3,393 baht per month), resulting in a substantial adequacy gap. In fiscal terms, the program’s expenditure accounts for only 0.03–0.05% of GDP and about 2–2.5% of total social welfare spending, a level far below regional and international standards. Nevertheless, the scheme serves as an automatic stabilizer by sustaining the purchasing power of low-income households (who have a high marginal propensity to consume) and mitigating adverse economic impacts. Policy analysis further highlights the trade-off between universal approaches, which promote equity and political acceptance, and targeted approaches, which are fiscally efficient but risk exclusion errors. The article recommends a hybrid model combining a “basic universal benefit” with “targeted top-ups” for vulnerable households, thereby achieving a balance between equity, efficiency, and fiscal sustainability. Ultimately, the child allowance policy should be regarded not as a fiscal burden but as a “social investment”, generating long-term returns in human capital development, intergenerational poverty reduction, and enhanced national competitiveness.