Kevin Corinth of the American Enterprise Institute highlights an important examination of government payouts.
A recent study put to the test an idea that has become increasingly influential over the past decade: To help kids thrive, one of the best things you can do is to give their parents cash with no strings attached.
This idea was the impetus in 2021 for the one-year replacement of the existing Child Tax Credit—which generally goes only to working parents—with a child allowance that provided up to $3,600 annually per child and was delivered as a monthly check regardless of whether parents work. Congress came up one vote short in the Senate from extending the child allowance into future years, and Democrats ever since have made bringing back the policy a top priority.
So what did the new study find about the effects of a child allowance? It didn’t boost kids’ development. The study provided $4,000 per year without conditions to a random selection of families from the time their child was born, and monitored the children’s outcomes for four years while receiving the payments. Across an array of cognitive tests, the kids receiving the generous child allowance scored no better than kids who did not receive it.
The results of the study apparently came as a surprise to its authors and others who have previously supported a child allowance. Jason DeParle in the New York Times this week wrote:
“Significant but indirect evidence has suggested that unconditional cash aid would help children flourish. But now a rigorous experiment, in a more direct test, found that years of monthly payments did nothing to boost children’s well-being, a result that defied researchers’ predictions and could weaken the case for income guarantees.”
The results should not have come as a surprise.
There is indeed a substantial body of evidence that more income is good for kids—it can improve their academic performance in the short run and their outcomes as adults in the long run. But there is an important caveat: Whether there are strings attached to the income makes a difference.
