Child cash benefits improve child health and development across the globe, study finds

Looking at programs from more than 140 countries, a University of Michigan-led study concludes that large-scale, government-funded child cash transfer programs improve child health outcomes.

These programs are an evidence-based way for nations to invest in the future health of their population and economy, says Luke Shaefer, faculty director of U-M’s Poverty Solutions and professor of social work and public policy.

Shaefer and colleagues analyzed evidence from low-income and high-income countries with child cash transfer programs in research that appears this month in The Lancet.

As the United States and other nations consider evidence-based strategies to improve children’s health and well-being, universal child cash transfer programs could be a solution to poor health outcomes for children and child poverty, the researchers say.

“Child cash transfers are not a new idea that needs testing,” Shaefer said. “Countries already have and are seeing success, some for more than a decade. We’ve seen the same kind of results in the U.S. in 2021 with the expanded Child Tax Credit. It is a policy built on mountains of evidence.”

UNICEF, he says, calls unconditional child benefits the “foundational policy” for child social development for a reason. They improve child and mother health and are an investment all nations should be making for their future.

Child cash benefit programs typically make recurring payments of cash (as income or tax transfers) to households with children.

The analysis of these international programs found that:

• Universal child cash benefits increased household income and decreased income instability, with positive effects on housing and food security
• Reduced caregiver stress and cognitive load
• Enabled higher rates of health care use and direct investments in children, such as more time spent engaging with them or enrichment to home learning environments

Children living in poverty are more likely to have experiences of adversity, as well as inadequate access to health care and human services. In turn, healthier children are better equipped to succeed academically and professionally, which ultimately drives economic growth and reduces long-term public health expenditures, Shaefer and colleagues say.

During the 2021 expanded Child Tax Credit, the U.S. joined other high-income countries by introducing a near-universal, unconditional child cash benefit distributed as monthly payments, which was the main driver in slashing child poverty in the U.S. to a historic low of 5.2%. Although the expanded CTC expired, state and local governments and communities have continued to advocate for and implement policies like it.

One example of a child cash transfer is the Rx Kids program, launched this year in Flint, Michigan, by Shaefer and Mona Hanna of Michigan State University. Rx Kids aims to “prescribe away poverty” by providing all pregnant moms in the Rx Kids community, regardless of income, with no-strings-attached cash of $1,500 during pregnancy and $500 each month throughout the baby’s first year.

To date, more than 1,200 families are enrolled in Rx Kids, with an estimated $5 million in cash prescribed by the end of 2024. Building on global and domestic research, the Rx Kids evaluation team is examining whether the program improves a wide array of individual and community outcomes, from maternal health to economic revitalization.

Early evidence finds that the program is associated with markedly increased housing security, improved ability to access food, and improved maternal mental health and well-being, including reduced postpartum depression.

In 2025, the Rx Kids program will expand to other areas of Michigan, with the first expansion city being Kalamazoo. However, Hanna and Shaefer have their sights set on the program, or something similar, becoming a nationwide policy.

The policy paper was among other articles featured in “A Presidential Briefing Book” for the next presidential administration. The paper’s co-authors include David Harris, Columbia University and UNICEF Innocenti Global Office of Research and Foresight; Dominic Richardson, The Learning for Well-being Institute in Amsterdam, Netherlands; and Miriam Laker, GiveDirectly in Kampala, Uganda.