Can Cash Transfers Improve Maternal Well-being and Family Processes among Families with Young Children? An Experimental Analysis

Abstract

Objective: The goal of this study is to examine the causal impacts of an unconditional cash transfer on a range of key family processes that are thought to affect children’s development, including economic hardship, maternal well-being, family relationships, and parenting.  Background: Although robust correlational evidence suggests that poverty harms children by increasing economic hardship, as well as reducing family well-being and the quality of family processes, few studies have used an experimental approach to comprehensively examine the effects of cash transfers on these pathways. Method: The Baby’s First Years study recruited 1,000 low-income mothers of newborns. Shortly after giving birth, mothers were randomized to receive a monthly unconditional cash transfer of either $333 or $20 per month. Follow-up data were collected from mothers approximately 12, 24, and 36 months after the birth of their child. Results: Although the intervention produced a moderate increase in household income and reduced poverty, we observe no detectable improvements in mothers’ subjective reports of economic hardship or the quality of play with their infants, and some small, although mostly non-significant, increases in parental psychological distress and declines in the quality of mothers’ relationships. However, mothers who received the higher cash gift amounts reported more frequently engaging in enriching child activities than did mothers who received lower cash gift amounts. Conclusion: We find little support for the hypothesis that material hardship, maternal well-being, or family relationships are positively affected by a moderate unconditional cash transfer among families with young children. Implications: Cash support may provide other benefits for families and children, but moderate levels of support do not appear to address self-reported economic hardship and maternal well-being as captured in standard survey measures.