Family Health Project
On: May 20, 2022

A Q&A with Duke University economist Lisa Gennetian

An extra $333 a month for new mothers may be enough to boost their babies’ brain development. That’s a preliminary finding of the first study in the U.S. to measure the impact of monthly unconditional cash on the healthy development of infants and toddlers.

Compared to a comparison group receiving a smaller monthly cash gift of $20, children of families with the larger cash benefit showed patterns of faster brain activity that other studies have linked with thinking and learning in older children.

Researchers on the Baby’s First Years study, a collaboration of neuroscientists and social scientists from six universities, will follow children to age four to see if the cumulative effects of additional cash, and if the faster brain activity captured when the children were infants, does indeed translate into better learning, said Lisa Gennetian, a lead researcher on the study and professor of public policy at Duke University

“I think anything and everything we learn about cash to families and children’s developmental outcomes in the first four years is going to be brand new information,” she said. “And we are looking at it very holistically—children’s health, socio-emotional health, and cognitive development.”

Family Health Project, which is providing 30 new mothers in Lynn and Roxbury, Massachusetts with a monthly cash benefit of $400 for three years, was modeled on the Baby’s First Years study and robust bodies of research that prove the efficacy of cash benefits like the Child Tax Credit to reduce poverty.

Not only do cash transfer policies reduce poverty, but they also are a sound investment in our children. A study published by the Center on Poverty and Social Policy at Columbia University posited that expanding the Child Tax Credit to a fully refundable child allowance would generate an 8x return on investment in benefits to society, including better health outcomes, increased future earnings, and decreased child protection and criminal justice costs, to name a few.

We recently spoke with Gennetian, who is also a Family Health Project advisory board member. She shared her insights on the study’s preliminary findings and the potential policy impacts of future discoveries.

Q: Why might getting money into the hands of caregivers make a difference in their babies’ development?

We have two driving hypotheses.

One is the investment pathway. This is coming out of the field of economics. The idea is that with more income, families could buy more enriching items for their children—more books, toys, and learning materials—or meet other needs, like quality childcare, improving their housing, or moving to a different neighborhood.

The other pathway is what we call the stress pathway. This is about whether more stable income in the household will reduce financial stress and improve mom’s emotional health which will translate into attentive, responsive parenting. Will it support positive engagement in their child’s learning, which can be strained by low and unstable economic resources?

Q: Why do the first months and years of a child’s development matter so much to their future lives?

What we’ve learned from neuroscientists is there’s lots of investment opportunity in those early years. If we think about all the things that babies learn to do from zero to three, it’s moving, crawling, standing, talking, interacting. And imagine now through a cash support and other interventions we could ensure that’s all happening in a safe and high-quality way with loving caregivers. That’s a child that’s going to be on his or her way.

This is not to say that all is lost after the early years, but there is enough evidence about the high return of investing so early.

And investing in those first three years through families makes sense. There is no other “system” that is available universally for children that age. Early education and prekindergarten are not available universally. The next touch point is public education, and that doesn’t happen until children are five or six years old.

Also, it’s costly to raise a child in the early years—the cost of diapers is high, the cost of childcare is high. So supporting families during the most difficult time also makes sense.

Q: Why would a relatively small amount of money ($333 a month) potentially make such a big difference to children and their families?

The families enrolled in the study were living at or below the federal poverty level. They were enrolled from 2018 to 2019 so that is between $20,000 and $25,000. The $333 a month is the equivalent of $4000 a year, so this is the equivalent of about a 20% boost in income. That’s one way to think about the magnitude.

We landed on this $4,000 a year based on a couple of things. Pre-pandemic, if you looked at the largest anti-poverty programs in the U.S., like the Earned Income Tax Credit and food stamp benefits, the amount transferred to families is $3,000 to $5,000 dollars on average. It’s also an income boost amount that some of the former experimental studies on welfare reform showed had positive effects on the achievement of school-aged children. So this amount felt reasonable and policy relevant.

Q: When studying the effects of poverty, why measure young children’s brain activity?

The research that led to the design of this study is across two fronts. There is robust evidence of impacts on children from studies of U.S safety net programs, like the Supplemental Nutrition Assistance Program and the Earned Income Tax Credit. What we’ve learned from those studies is the positive impacts of reducing poverty on student achievement, on measures like birth weight, increases in future earnings, reductions in future crime. There’s a whole body of evidence around outcomes except for what happens after birth up until children are in some type of group-based setting like childcare or pre-school.

In the meantime, there is another exciting body of research coming out of neuroscience and capitalizing on the availability of the EEG equipment that measures children’s brain activity. That was becoming less expensive, easier to use, and that empirical work has shown that there seems to be a correlation between children’s socio-economic environment, things like household income, and what’s happening inside the brain.  But it’s very descriptive. We don’t know if it’s income or income with other things that might be generating this statistical relationship.

So Baby’s First Years aims to fill this gap in scientific evidence. Because this is a randomized controlled study, we will have the ability to make causal inference between family income and children’s early brain development.

Q: What are some interesting features of your study?

The 1,000 families in our study live in very different contexts. New York City has a high cost of living but is also very service rich. There are lots of early childhood interventions and high poverty programs. And then there are places like New Orleans that do not have a robust policy investment in families locally but have a lower cost of living. And then the Twin Cities and Omaha are in between. They are all getting the same amount of money. So it will be interesting to see how that money will be used.

I’m excited that we have a very racially, ethnically diverse sample: 80 percent of moms identify as Latina or Black. The racial and ethnic diversity of children is projected to increase in the U.S., and Latina/o children and families are underrepresented in earlier long-term studies about children’s development.

Also, there is a whole implementation component to the study that is incredibly exciting. Interviewers from the Survey Research Center were trained in how to measure brain activity with portable EEG machines. They had to learn how to put these cute caps on the babies and give them iPads with Baby Shark videos. You can actually go out into the world with people who are not neuroscientists and try to expand our knowledge base with these types of data collection tools.

Q: What policy impact do you hope your study will have?

We always thought this study would inform two things about policy. One is, what happens if you cut back on benefits? During the Trump administration, part of the conversation was, how do you add more restrictions to SNAP (Supplemental Nutrition Assistance Program) benefits? So we thought this study could potentially show the negative impacts of that. And then this thing happened last year called the expanded Child Tax Credit which in some ways mimics the cash gift in our study. The amounts are similar with a very important exception: With Baby’s First Years you’re only getting one payment no matter how many children are in the family. The expanded Child Tax Credit was designed to be one payment per child.

The U.S. stands apart from its peer nations in not giving pure income support to parents. You have to be working and show some proof of earnings. If this study can get the U.S. to a place where getting Child Tax Credits that are fully refundable—meaning it’s not conditioned on earnings—I think that would be an enormous contribution.