Giving Cash to Poor Families Might Not Help the Kids

A major new study finds direct cash payments to low-income families may not actually boost young children's development, challenging a widely held belief. The ambitious Baby's First Years experiment tracked 1,000 low-income mothers in four US cities, randomly assigning half to receive $333 in monthly, no-strings-attached payments for four years—while the other half got just $20, per the New York Times. At the end of the trial, researchers found that the extra money hadn't moved the needle on seven key measures of child development, including language skills, behavior, cognitive ability, and health.

Economist Greg Duncan, one of the study's leaders, said he was surprised "the money did not make a difference." The findings stand in contrast to earlier, less direct evidence and could complicate political efforts to revive expanded child tax credits, which briefly provided most American families up to $300 a month per child in 2021. Researchers are divided over how much to read into the results. Some note that the payments were smaller than the 2021 child tax credit and may have been diluted by pandemic-related aid, with most families remaining low-income through the trial. Others suggest that benefits could appear later or require larger sums.

Notably, the study found no evidence that unconditional payments led parents to misuse funds or reduce their work efforts. Mothers who received $333 monthly spent modestly more on child-related goods and time with their kids, but reported higher anxiety levels, potentially due to increased pressure to parent well. Conservative critics say the findings support their argument that cash alone can't solve broader issues facing poor families, such as subpar schools and unsafe neighborhoods.