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Effects of a monthly unconditional cash transfer starting at birth on family investments among US families with low income

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.

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Fig. 1: ITT estimates of impact of the high-cash gift on income and poverty status.
Fig. 2: ITT estimates of impact of the high-cash gift on maternal time use.
Fig. 3: ITT estimates of impact of the high-cash gift on expenditures.

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Data availability

The data that support the findings of this study are publicly available at the Inter-University Consortium for Political and Social Research (see Magnuson et al.87 at https://doi.org/10.3886/ICPSR37871.v5).

Code availability

No custom code was developed for this research. Analysis code is at https://www.openicpsr.org/openicpsr/project/159422/version/V2/view.

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Acknowledgements

We thank O. Attanasio, D. Del Boca, F. Cunha, L. Katz, S. Lundberg and participants in the National Bureau of Economic Research’s Children’s Program March 2021 meeting, and in seminars at San Diego State University’s Center for Health Economics and Policy Studies and University of California Santa Barbara for feedback. In addition, we thank A. Karsh and L. Meyer for their important contributions to study support and infrastructure, and L. Basurto, C. Behrer, R. Daniel, E. Premo, M. Sauval, H. Shah, M. Spiegel, L. Stilwell, J. Wedewer and P. Youngmin Yoo for their assistance with data processing and analyses. We thank the University of Michigan Survey Research Center, our collaborators for recruitment, data collection and maintaining contact with families. We are profoundly grateful to the BFY study site community partners and families. Research reported in this publication was supported by the Eunice Kennedy Shriver National Institute of Child Health and Human Development of the National Institutes of Health under Award Number R01HD087384 (G.D., K.M. and K.G.N.) and 2R01HD087384 (G.D., L.A.G., K.M. and K.G.N.). The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health. This research was additionally supported by the US Department of Health and Human Services, Administration for Children and Families, Office of Planning, Research and Evaluation (R01HD087384; G.D., K.M. and K.G.N. and 2R01HD087384; G.D., L.A.G., K.M. and K.G.N.); Office of Behavioral and Social Sciences Research-Office of the Director, National Institutes of Health (2R01HD087384; G.D., L.A.G., K.M. and K.G.N.); Andrew and Julie Klingenstein Family Fund (K.G.N.); Annie E. Casey Foundation (214.0183; K.G.N.); Arnold Ventures (21-06173; K.G.N.); Arrow Impact (K.G.N.); BCBS of Louisiana Foundation (K.M.); Bezos Family Foundation (K.G.N.), Bill and Melinda Gates Foundation (OPP1185312; K.G.N.); Bill Hammack and Janice Parmelee (K.M.), Brady Education Fund (G.D.); Chan Zuckerberg Initiative (Silicon Valley Community Foundation; 2017-177918; K.G.N.); Charles and Lynn Schusterman Family Philanthropies (13080; K.G.N.); Child Welfare Fund (13-1624202; K.G.N.); Esther A. and Joseph Klingenstein Fund (K.G.N.); Ford Foundation (0170-0832; K.G.N.); Greater New Orleans Foundation (K.M.); Heising-Simons Foundation (542569; K.M. and S.H.-M.); Holland Foundation (542709; K.G.N.); Jacobs Foundation (102535; G.D.); JPB Foundation (1132 and 2711 and 3652; K.G.N.); J-PAL North America (S5341 and 21-05679 G.D. and L.A.G.); Lozier Foundation (K.G.N.); New York City Mayor’s Office for Economic Opportunity (CT1 069 20201415397; K.G.N.); Perigee Fund (K.G.N.); Robert Wood Johnson Foundation (71446 and 75592 and 78562; K.G.N.); Robin Hood (L.A.G.); Sherwood Foundation (4288; K.G.N.); Valhalla Foundation (K.G.N.); Weitz Family Foundation (K.G.N.); W.K. Kellogg Foundation (P3031579; K.G.N.); and three anonymous donors (G.D. and K.M.). The funders had no role in study design, data collection and analysis, decision to publish or preparation of the manuscript.

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G.D., N.A.F., L.A.G., K.M., K.G.N. and H.Y. equally contributed to the design and implementation of the study, project planning, data collection, data interpretation and manuscript writing. S.H.-M. contributed to the design and implementation of the qualitative substudy, data interpretation and manuscript writing.

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Correspondence to Lisa A. Gennetian.

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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 (2024). https://doi.org/10.1038/s41562-024-01915-7

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