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Children represent the largest indirect beneficiaries of the U.S. social welfare system. Yet, many questions remain about the direct benefits of cash aid to children. The current understanding of the impacts of cash aid in the U.S. is drawn primarily from studies of in-kind benefits, tax credits, and conditional cash aid programs. A corresponding economics literature focuses on the labor supply responses of parents and the role of income, parenting skills, and early education as family investment mechanisms that reduce socioeconomic inequality in children's well-being. In contrast to the U.S., dozens of low- to middle-income nations use direct cash aid--conditional or unconditional--as a central policy strategy, with demonstrated positive effects across a host of economic and health measures and selected aspects of children's health and schooling. This paper reviews the economic research on U.S. safety net programs and cash aid to families with children and what existing studies reveal about its impacts on family investment mechanisms and children's outcomes. We specifically highlight gaps in understanding the impacts of unconditional cash aid on children. We then review nine contemporary unconditional cash transfer programs and discuss their promise and limitations in filling the U.S.-based economic evidence gap about the impact of cash aid on children's development.
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College-educated mothers spend substantially more time in intensive childcare than less educated mothers despite their higher opportunity cost of time and working more hours. Using data from the 2010-2013 and 2021 waves of the Well-being Module of the American Time Use Survey, we investigate this puzzle by testing the hypothesis that college-educated mothers enjoy childcare more. We find that among all mothers, spending time in childcare is associated with higher positive feelings compared to spending time in other activities. However, college-educated mothers experience no more positive feelings and no fewer negative feelings during intensive childcare than other mothers. Moreover, college-educated mothers report substantially fewer positive feelings for time spent in management activities and substantially more negative feelings for time spent in educational activities with their child. Findings are robust to controlling for a rich set of covariates, mother fixed effects, and simulations to account for selection into intensive childcare.
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We examine long-term neighborhood effects on low-income families using data from the Moving to Opportunity (MTO) randomized housing-mobility experiment, which offered some public-housing families but not others the chance to move to less-disadvantaged neighborhoods. We show that 10-15 years after baseline MTO improves adult physical and mental health; has no detectable effect on economic outcomes, youth schooling and youth physical health; and mixed results by gender on other youth outcomes, with girls doing better on some measures and boys doing worse. Despite the somewhat mixed pattern of impacts on traditional behavioral outcomes, MTO moves substantially improve adult subjective well-being.
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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.
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We examine long-term neighborhood effects on low-income families using data from the Moving to Opportunity (MTO) randomized housing-mobility experiment, which offered some public-housing families but not others the chance to move to less-disadvantaged neighborhoods. We show that 10-15 years after baseline MTO improves adult physical and mental health; has no detectable effect on economic outcomes, youth schooling and youth physical health; and mixed results by gender on other youth outcomes, with girls doing better on some measures and boys doing worse. Despite the somewhat mixed pattern of impacts on traditional behavioral outcomes, MTO moves substantially improve adult subjective well-being.
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Although non-experimental studies find robust neighborhood effects on adults, such findings have been challenged by results from the Moving to Opportunity (MTO) residential mobility experiment. Using a within-study comparison design, this paper compares experimental and non-experimental estimates from MTO and a parallel analysis of the Panel Study of Income Dynamics (PSID). Striking similarities were found between non-experimental estimates based on MTO and PSID. No clear evidence was found that different estimates are related to duration of adult exposure to disadvantaged neighborhoods, non-linear effects of neighborhood conditions, magnitude of the change in neighborhood context, frequency of moves, treatment effect heterogeneity, or measurement, although uncertainty bands around our estimates were sometimes large. One other possibility is that MTO-induced moves might have been unusually disruptive, but results are inconsistent for that hypothesis. Taken together, the findings suggest that selection bias might account for evidence of neighborhood effects on adult economic outcomes in non-experimental studies.
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