Effects of a monthly unconditional cash transfer starting at birth on family investments among US families with low income - The Samuel DuBois Cook Center on Social Equity at Duke University

Authors: Lisa A. Gennetian, Greg J. Duncan, Nathan A. Fox, Sarah Halpern-Meekin, Katherine Magnuson, Kimberly G. Noble and Hirokazu Yoshikawa

Journal: Nature Human Behaviour

Abstract: How does unconditional income for families in poverty affect parental investments for their young children? Mothers in four US metropolitan areas were randomized to receive a monthly unconditional cash transfer of either $333 per month (high) or $20 per month (low) for the first several years after childbirth. During the first 3 years, high-cash gift households spent more money on child-specific goods and more time on child-specific early learning activities than the low-cash gift group. Few changes were evident in other core household expenditures. Compared with low-cash gift families, high-cash gift families reported lower rates of public benefit receipt and fewer were residing in poverty, although mean income and wealth remain low for the majority of families by year 3. No statistically significant differences were evident in mothers’ participation in paid work, children’s time in childcare or mothers’ subjective wellbeing.

Key Findings

The findings offer empirical evidence that predictable, monthly unconditional cash impacts spending in ways that may be beneficial for children in a contemporary US context, thus complementing studies of impacts on children’s outcomes generated from quasi-experimental studies such as those of maternal pensions and income transfers to Indigenous populations.
These findings on spending directed towards child-specific goods are qualitatively similar to findings documented in other research, such as the Dutch child benefit and a cash transfer labelled as ‘education support’ given to fathers of school-aged children in poor rural communities in Morocco
The child-focused design of the cash gift in this study may have particularly encouraged households’ complementary investments in child-specific goods and time spent with the child; that is, having money to purchase books may have also fostered more time spent reading books.

Citation: Gennetian, L.A., Duncan, G.J., Fox, N.A. et al. Effects of a monthly unconditional cash transfer starting at birth on family investments among US families with low income. Nat Hum Behav 8, 1514–1529 (2024). https://doi.org/10.1038/s41562-024-01915-7

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