We review existing research and policy evidence about income as an essential component to meeting children’s basic needs—that is, income represented as the purest monetary transfer for increasing the purchasing power of low income families. Social scientists have made great methodological strides in establishing whether income has independent effects on the cognitive development of low-income children. Our review of that research suggests that a $1,000 increase in income has positive, but small, effects on children, rarely exceeding 1/10th of a standard deviation change in outcomes for children. We argue that researchers are well-positioned for more rigorous investigations about how and why income affects children, but only first with thoughtful and creative regard for conceptual clarity, and on understanding income’s potentially inter-related influences on socio-emotional development, mental, and physical health. We also argue for more focus on the effects of income transfers, including when conditional on employment, as compared to more targeted direct investments in children. We end with a description of two-generation and cafeteria-style programs as the frontiers of the next generation in income-enhancement policies, and with the promise of insights from behavioral economics.
This study uses data from an experimental employment program and instrumental variables (IV) estimation to examine the effects of maternal job loss on child classroom behavior. Random assignment to the treatment at one of three program sites is an exogenous predictor of employment patterns. Cross-site variation in treatment-control differences is used to identify the effects of employment levels and transitions. Under certain assumptions, this method controls for unobserved correlates of job loss and child well-being, as well as measurement error and simultaneity. IV estimates suggest that maternal job loss sharply increases problem behavior but has neutral effects on positive social behavior. Current employment programs concentrate primarily on job entry, but these findings point to the importance of promoting job stability for workers and their children.
This study uses geocoded address data and information about parent’s economic behavior and children’s development from four random-assignment welfare and anti-poverty experiments conducted during the 1990s. We find that the impacts of these welfare and anti-poverty programs on boys’ and girls’ developmental outcomes during the transition to early adolescence differ as a function of neighborhood poverty levels. The strongest positive impacts of these programs are among boys who lived in high-poverty neighborhoods at the time their parents enrolled in the studies, with smaller or non-statistically significant effects for boys in lower poverty neighborhoods and for girls across all neighborhoods. This research informs our understanding of how neighborhood context and child gender may interact with employment-based policies to affect children’s well-being.
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