In 2018, a groundbreaking experiment called Baby’s First Years was launched, which studies young children in the United States. The main question it asked was simple: What does giving $4,000 a year, freely, to families with young children do for them?
The first study from the experiment came out in 2022 and suggested that cash may lead to greater brain activity in children whose families received more cash. That conclusion received a fair bit of criticism. Fortunately, the kids who were recruitment Through outreach to low-income mothers in hospital maternity wards, now they are about 6 years old and we can measure much more than their brain waves.
So… what did the cash do? my reading series of the papers There are large groups of test writers release So far it has generally had positive effects that we hope to have additional cash. Parents getting cash did a little less work, but not much less. Their income (including cash) was considerably higher. They spent more on things for their kids.
In some ways, the more interesting results on paper are zeroes: things that don’t cash. For example, it does not make child care more or less likely to be used. It does not change breastfeeding rates. And (this really surprised me) it doesn’t seem to reduce mothers’ stress levels.
There are areas where we know a lot about cash payments. This research is particularly informative about questions about which we know little, and it provides a useful dose of humility. Cash is very helpful, but it is not a panacea, and we should be clear about what it can and cannot do.
Big results
Usually, when I talk to researchers about their new papers, I have questions for them. When Lisa Genetian, a professor of public policy at Duke and one of the lead researchers on Baby’s First Years, reached out a few weeks ago to talk about the latest results of the experiment, she was calling me with a question..
The researchers had several interesting findings, he explained, but the picture these findings painted was messy and sketchy. How, the geneticist asked me, do we get this, especially in an environment where it’s easy to spread simple messages like “this program worked” or “this program failed”?
I don’t know that I have a great answer to his question, but I’ll do my best to give the nuances I was highlighting.
The team had two main theories about how giving cash could help children develop. The first is the investment route: cash gives parents resources they can invest in expenses that help children, such as childcare or books, and spend more time with their children, either working fewer hours or paying for time-consuming jobs. (cooking, say) that detracts from time with the kids.
The second was the stress pathway: there are plenty of reasons to think so Poverty increases stress levels And that stress leads to bad decisions and home environments. If cash transfers reduce stress among parents, it may improve outcomes for children in the long term.
Tests have so far found one Decent amount of evidence For investment avenues. The researchers found that mothers who earned $333 per month ($4,000 per year) were more likely to work as mothers for $20 a month (the control group, given a nominal amount to ensure they answered the follow-up survey). however, They reported working fewer hours, especially during the pandemic. This means they can have more time to spend with their children.
Spending time with children in learning and enrichment activities (such as reading to them, telling stories, making toys, pretending, etc.) was higher among mothers with more cash. That said, the absolute amount of the increase wasn’t large — just 11.3 minutes more per week than the control group, a 5.2 percent increase from about three and a half hours per week at baseline. Perhaps the most encouraging finding is that mothers receiving more cash spent $67.80 more per month on baby-specific purchases, such as clothing, toys, books, etc. Given that the high-cash group received $313 more per month than the low-cash group, this suggests that about one in five of the extra dollars was spent directly on child-related items.
So cash allows people to invest more time and money in their children. What about stress? Here the results are more ambiguous. Mothers did not report being happier or more satisfied with their lives with more money than with less. The results were insignificant and, often, the magnitudes were negative: the data showed that high-cash moms were ever-so-slightly less happy, not more. I know of relatively little research on the effects of cash transfers on happiness in rich countries, but cash payments in poor countries seem to have Moderately increase happiness. “It had no effect” is more correct than “money makes people sad,” but that’s still not the result you want to see if you’re worried about maternal stress.
a previous paper Examines the effects of cash on self-reported stress and levels of cortisol, a hormone associated with stress in mothers’ hair. There was no significant difference between mothers receiving a lot of cash and mothers receiving little.
While cash transfers may help children develop by allowing their parents to spend more time and money on them, the idea that it’s an effective stress-reliever is looking more dubious.
Cash as tool versus cash as panacea
I really tried to write this entire article without using the phrase “cash is not a cure”. I hate it when journalists or researchers describe something as “not a cure” or “not a cure all”. Nothing is a cure-all! This is a ridiculous standard by which to judge anything! You don’t condemn aspirin because it doesn’t destroy brain tumors.
Cash transfers, over the past decade, have gone from an underrated and simple policy tool to such a hide that some advocates are claiming it cures things it doesn’t cure at all. Take homelessness, for example. The Denver Basic Income Project That city initially offered a group of homeless residents $1,000 a month for a year. A second group received the same total amount, but mostly as a lump sum, and a third group received $50 a month for a year.
If large cash transfers reduce homelessness, we would expect the first two groups to be more likely to be housed one year later than the third group. that was not true: 43 percent of the $50 per month group were retained after 10 months, compared to 44 percent of the $1,000 per month group. Differences were minimal and not statistically significant. However, the project was hailed as a huge success; of Business Insider title was, “Denver gave $1,000 a month to people experiencing homelessness. A year later, about half of the participants had housing.” This is about the most confusing way I can imagine to write about a project that has not had a significant impact on the problem it is trying to solve.
What is one way that homeless people do not need cash assistance? Of course not — but it’s valuable and important to learn that cash isn’t enough to house homeless people. The high proportion of all groups receiving housing indicates that many were going through a temporary shock, such as being laid off or leaving a partner, but could eventually find shelter again once the shock passed. This may also suggest that the housing support services received by all groups in the experiment were effective, perhaps even more so than raw cash.
The point of this study is not to create clickable headline results that show how great cash is. What cash can and cannot do should be detailed, and better programs should be developed that take those limitations into account.
Our findings on stress and maternal happiness in studies of the infant’s first year should also be taken with this attitude. Cash seems to help moms in that study in really important ways. They were less likely to be poor, and had less of an impact on work. They spent more money and time on their children. They may need a variety of programs to effectively address their mental health, such as access to psychotherapy or individual social time to reduce loneliness. Cash can’t do everything – and what’s more, it shouldn’t.
