Working Paper: NBER ID: w30379
Authors: Lisa A. Gennetian; Greg Duncan; Nathan A. Fox; Katherine Magnuson; Sarah Halpern-Meekin; Kimberly G. Noble; Hirokazu Yoshikawa
Abstract: A key policy question in evaluating social programs to address childhood poverty is how families receiving unconditional financial support would spend those funds. Economists have limited empirical evidence on this topic in the U.S. We provide causal estimates of financial and time investments in infants among families living in poverty from a large-scale, multi-site randomized controlled study of monthly unconditional cash transfers starting at the time of a child’s birth. We find that the cash transfers increased spending on child-specific goods and mothers’ early-learning activities with their infants. The marginal propensity to consume child-focused items from the cash transfer exceeded that from other income, consistent with the behavioral cues in the cash transfer design. We find no statistically detectable offsets in household earnings nor statistically detectable impacts in other pre-registered outcomes related to general household expenditures, maternal labor supply, infants’ time in childcare, or mothers’ subjective well-being.
Keywords: cash transfers; family investments; child development; poverty alleviation; randomized controlled trial
JEL Codes: D13; H31; I30; J13; J18; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cash transfers (F24) | spending on child-specific goods (D19) |
| cash transfers (F24) | mothers' early-learning activities (A21) |
| higher cash gift (D64) | increased expenditures on child-specific items (D19) |
| cash transfers (F24) | no detectable offsets in household earnings (J31) |
| cash transfers (F24) | no impacts on maternal labor supply (J22) |
| mothers' perception of cash gift (D19) | mental earmarking for child-related expenses (D14) |