The Baby’s First Years program is one of many throughout the US currently giving unconditional cash payments to people to see whether they improve individual and family outcomes. In the case of Baby’s First Years, the program narrowly targets low-income mothers. It started giving them $333 per month in 2018 and 2019 shortly after giving birth, continuing through the babies’ fourth year (an approximately 20 percent boost in income).

The program was set up as a
randomized control trial (RCT). Researchers established a “control” group of
low-income mothers who also had new babies but received only a small monthly
amount of $20 rather than the larger payment. (They recruited mothers from four
US cities/areas: New Orleans, Omaha, New York, and the Twin Cities.) This
allows the researchers to compare outcomes across the two groups and attribute whatever
differences emerge to the larger monthly payments.

In recent weeks, the study published some interesting results exploring whether cash payments changed infants’ brain activity in the first year of life. This might seem like an overly scientific question without much practical relevance, but as the researchers explain:

More absolute power in mid-to-high (i.e., alpha, beta, and gamma) frequency bands has been associated with higher language, cognitive, and social-emotional scores, whereas more absolute and/or relative low-frequency (i.e., theta) power has been associated with the development of behavioral, attention, or learning problems.

The researchers hypothesized that
the higher income from the Baby’s First Years payments would lead to higher
brain activity among these infants. And if true, the higher brain function
could translate into better cognitive outcomes later in childhood and
ultimately better outcomes as adults.

The results were slightly mixed,
but overall the authors concluded that the intervention “appeared to cause
changes in children’s brain functioning in ways that have been linked to
subsequent higher cognitive skills.” In other words, the larger cash payments
seemed to improve brain function in ways that would benefit these children in
the long term, suggesting it could be an effective anti-poverty policy.

All of this still might sound like a stretch. But the theory behind the study has a good deal of support in the scientific literature, with Harvard University’s Center on the Developing Child offering a compilation of resources. Before policymakers start advocating for unconditional child payments (e.g., an expanded Child Tax Credit), however, a few crucial questions remain.

One of the key questions is whether
the positive effects on brain function will fade over time. The results from
this study reflect only the first year of life. It is possible that the
positive results reflect a timing issue and babies in the control group will
catch up over time.

Another question is whether
improved brain function after one year actually translates into better outcomes
for these children over the long term. It is an important question because many
things, including family structure and access to education, determine outcomes
for children. We do not really know the relative importance of these factors compared
to brain function, for example — and they likely are interrelated. If the
payments have no impact on other factors like family structure and education
quality (or even negative effects), unconditional cash payments might have very
limited positive effects for children even if they improve brain function.

The mechanism by which the payments
improved brain function is also important to understand. A few possible
pathways exist. The payments might have allowed parents to purchase more
necessities. But it is also possible that they allowed parents to spend more
time with their infants (i.e., bonding) or that the payments reduced
money-related stress. It is also possible that the payments did all of these
things and benefitted children in different ways. Understanding the precise
pathway is important because it will help policymakers assess whether
unconditional cash payments are the key, or whether other policies, such as
home visiting programs, could produce the same positive results on brain
function while offering other positive health and social outcomes and limiting
any negative side effects.

In the end, the results from this study highlight the importance of understanding young child development and the role of income and other factors. Unconditional cash payments (from the government or private philanthropy) might have a role to play in improving child outcomes, but we need answers to many other questions before settling on simply sending people cash as the policy of choice.

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