Study Undercuts Idea That Cash Payments to Poor Families Help Child Development

New York Times

2 days ago

If the government wants poor children to thrive, it should give their parents money. That simple idea has propelled an avid movement to send low-income families regular payments with no strings attached.
Significant but indirect evidence has suggested that unconditional cash aid would help children flourish. But now a rigorous experiment, in a more direct test, found that years of monthly payments did nothing to boost children's well-being, a result that defied researchers' predictions and could weaken the case for income guarantees.
After four years of payments, children whose parents received $333 a month from the experiment fared no better than similar children without that help, the study found. They were no more likely to develop language skills, avoid behavioral problems or developmental delays, demonstrate executive function or exhibit brain activity associated with cognitive development.
'I was very surprised — we were all very surprised,' said Greg J. Duncan, an economist at the University of California, Irvine and one of six researchers who led the study, called Baby's First Years. 'The money did not make a difference.'
The findings could weaken the case for turning the child tax credit into an income guarantee, as the Democrats did briefly four years ago in a pandemic-era effort to fight child poverty.
That effort, in 2021, provided most families with children monthly checks of up to $300 per child and helped push child poverty to a record low, though it did not receive the kind of rigorous evaluation of its developmental impacts the new study offers. It lapsed after a year, and Democratic efforts to extend it failed amid unified Republican opposition. Many Democrats are pushing to bring it back.
While the new research may shape the debate over income guarantees, the leaders of the new study disagree among themselves about the relevance of the experiment's results.
Some think the pandemic, which erupted soon after the research began, may have skewed outcomes, both because it disrupted lives and triggered large government aid programs that diluted the impact of the stipends provided by the study.
The payments from Baby's First Years were also much smaller, on a per-family basis, than those the Democrats propose. Larger payments might have beneficial effects. Since the test was unusual in targeting children in their earliest years, it is also possible that benefits will appear later, after they start school.
Still, the test was unusually comprehensive, and the lack of results provides conservative critics of cash guarantees an empirical talking point.
'It shows that money alone won't lead to better outcomes for children,' said Robert Doar, president of the conservative American Enterprise Institute, who supports imposing work rules on aid on the theory that working parents offer children role models.
The study did not test noncash programs like food stamps or Medicaid or subsidies tied to work. The results were reported earlier by NPR.
It has long been clear that children from affluent families exhibit stronger cognitive development and fewer behavioral problems, on average, than their low-income counterparts. The question is whether their advantage comes from money itself or from related forces like parental health and education, neighborhood influences or the likelihood of having two parents in the home.
A landmark study in 2019 from the National Academies of Science, Engineering and Medicine found that 'poverty itself causes negative child outcomes' and aid programs often help. But most of the evidence came from studies of noncash benefits, like food stamps or Medicaid, or the earned-income tax credit, a subsidy for parents with jobs. Some of the studies were decades old, when the safety net was smaller and expansions might have had larger effects.
For a more precise test of cash guarantees, Baby's First Years raised about $22 million from the National Institutes of Health and private foundations and recruited 1,000 poor mothers with newborns in New York, New Orleans, greater Omaha and Minneapolis-St. Paul. More than 80 percent were Black or Latino, and most were unmarried.
After randomly dividing the parents, researchers gave one group $333 a month while the other got a nominal $20. Random-control testing is considered an especially rigorous form of evaluation.
The researchers specified in advance seven measures on which they thought children in high-cash families would outperform the others. But after four years they found no group differences on any of the yardsticks, which aimed for a comprehensive look at child development.
Children in the families getting the higher cash payments did no better on tests of vocabulary, executive function, pre-literacy skills or spatial perception. Their mothers did not rank them more highly on assessments of social and emotional behavior. And they were no more likely than the children in the low-cash group to avoid chronic health conditions like asthma.
Mothers in the high-cash group did spend about 5 percent more time on learning and enrichment activities, such as reading or playing with their children. They also spent about $68 a month more than the low-cash mothers on child-related goods, like toys, books and clothing.
At the same time, the study found no support for two main criticisms of unconditional payments. While critics have warned that parents might abuse the money, high-cash mothers spent negligible sums on alcohol and no more than low-cash mothers, according to self-reporting. They spent less on cigarettes.
Nor did they work less. While opponents say income guarantees could erode the work ethic, mothers in the two groups showed no differences across four years in hours worked, wages earned or the likelihood of having jobs. The high-cash mothers did prove less likely to work full time during the pandemic, which researchers considered positive — evidence that aid helps parents manage emergencies.
One puzzling outcome is that the payments failed to reduce mothers' stress, as researchers predicted. On the contrary, mothers in the high-cash group reported higher levels of anxiety than their low-cash counterparts. It is possible they felt more pressure to excel as parents.
Contrary to predictions by the researchers, children in both groups showed similar patterns of brain activity on the study's main neurological yardstick, an index of high-frequency brain activity, as measured by an electroencephalogram. High-frequency brain activity is often associated with cognitive development.
Though an earlier paper showed promising activity on a related neurological measure in the high-cash infants, that trend did not endure. The new study detected 'some evidence' of other differences in neurological activity between the two groups of children, but its significance was unclear.
While researchers publicized the earlier, more promising results, the follow-up study was released quietly and has received little attention. Several co-authors declined to comment on the results, saying that it was unclear why the payments had no effect and that the pattern could change as the children age.
'Anyone who tries to tell you they know what the data mean is just speculating,' Katherine A. Magnuson, a professor of social work at the University of Wisconsin-Madison, wrote in an email. The payments continued for more than six years, and future analyses will examine the longer-range effect.
Arloc Sherman of the Center on Budget and Policy Priorities, a supporter of income guarantees, said the results were affected by the pandemic and should be weighed against conflicting evidence. 'I don't think these results undermine the conclusion, from a large volume of studies, that income is important for children's health, education and development,' he said.
Jane Waldfogel, a professor at Columbia University whose book 'Child Benefits: The Smart Investment for America's Future' supports child-rearing subsidies, said the experimental payments were too small to have the predicted effect. Because the aid was capped at $333 per family, not per child, she said, households received an average subsidy less than half of what Democrats offered in 2021 and typically propose.
'It just wasn't enough to reduce financial hardship and strain,' Ms. Waldfogel said.
The payments initially increased household income by 18 percent, but high inflation eroded their value. Virtually all parents in both groups remained low-income throughout the four years, and they reported similar levels of hardships like evictions or utility cutoffs.
Robert Rector, an opponent of income guarantees at the Heritage Foundation, praised the rigor of the study and said it 'blows the arguments for unconditional cash aid out of the water.'
The results are unsurprising, he said, because the safety net already provides what he called large food, health care, and wage subsidies, meaning few families face dire conditions and the extra stipends did little to differentiate the groups.
While the aid did not boost child development in measurable ways, it may still have enriched family life. Some parents told researchers it let them buy children special gifts or share meaningful experiences, like dining out or visiting a zoo. One proudly photographed the winter coat she bought her child.
'The mothers are certainly not saying this money doesn't matter,' said Sarah Halpern-Meekin, a sociologist at the University of Madison-Wisconsin, who oversaw parent interviews.
Michael R. Strain of the American Enterprise Institute said the study reinforced his doubts about cash aid, but he encouraged fellow conservatives not to make too much of it. 'It seems completely plausible to me that the pandemic overwhelmed an effect from the income,' he said.
Still, he noted that poor families faced problems as varied as bad schools, violent neighborhoods and a shortage of role models. 'Can $300 a month address that?' he said. 'I don't know why it would.'
A single study may alter few minds, but it has changed one expert's thinking. Mr. Duncan, a leading child poverty researcher, had been persuaded by studies of Medicaid, food stamps and the earned-income tax credit that unconditional cash aid would improve children's outcomes. But the uniform new results have made him reconsider.
'There is strong evidence that these other safety net programs reduce intergenerational poverty,' Mr. Duncan said. 'Our cash payments appear unlikely to follow suit. We've got to come to grips with that.'