How Policy Informed by Behavioral Science Can Help Children in Poverty

One out of five children age 0 to 3 in the United States reside in poverty. That’s nearly 2.6 million infants and toddlers living with roughly $24,000 for a family of four. Tragically, the odds are low—less than one out of five—that these children will ever escape poverty, meaning that many of these children are fated to live with poorer health, increased stress, and lower overall well-being, further magnified for children of racial and ethnic minorities.

Although most scientists agree that childhood poverty can have lifelong and pernicious effects, they disagree about the best way to help.

Poverty can leave a lasting scar on children, even when parents are supportive, responsive, and sustain regular routines.

On the one hand, some scientists and policy makers focus on the financial aspect of poverty, arguing that the travails of poverty all start from a common source: a lack of money itself. They contend that economic hardship affects how parents provide for and interact with their children. Indeed, poverty can leave a lasting scar on children, even when parents are supportive, responsive, and sustain regular routines, all of the features of high-quality parenting that child developmentalists emphasize. For this camp, if parents had more money, and else were equal, the other issues children face would dissipate.

On the other hand, critics counter that what matters most is not the money itself but all of the other factors related to poverty, such as low education, underemployment, poor health or health care, unsafe neighborhoods, and lower quality early education care and services. For this camp, money on its own would not fix the attendant challenges of poverty; rather, what’s needed is larger investments in things like job-training programs, housing, schools, and home visiting, parent and early education programs.

For years, it has been the thinking of this second camp that has guided policy. The best-funded antipoverty and early-childhood programs largely disregard parents’ multiple identities—not only as parents but also as earners, teachers, nurturers, or civic leaders. As one example, with some exceptions in the arena of pre-K, home visiting, early education, and care programs are not universal. Even among those that are available, programs are rarely designed to match parents’ work schedules or other commitments. Paid-leave policy—essential for parents during the first few months after birth of a child—is rarely available to low-wage workers.

For scientists and policymakers who urgently want to help, the dilemma is twofold. First, is it poverty per se that matters, or are other contextual factors equally important? And, second, what poverty policy can reasonably work for families that face a myriad of constraints related to employment?

My colleagues (Greg Duncan, at the University of California, Irvine; Katherine Magnuson, at the University of Wisconsin, Madison; Kimberly Noble, at Columbia University; and Hiro Yoshikawa, at New York University) and I are launching a study to put these questions to the scientific test.

Can a “basic income” leverage windows of developmental opportunity for children?

The broader poverty policy debate rarely focuses on the circumstances of the youngest children. The birth of a child is a unique opportunity to break the cycle of poverty. For infants, it’s a crucial developmental period, and getting the consistent, dependable care they need can equip them to handle the challenges they’ll later face. For parents, who are primed to focus and invest in their infant, it’s a chance to establish good routines, like eye contact, patience, and being positively responsive to foster children’s learning, that will have a greater chance of lasting through childhood and adolescence. Extra income for new parents may be especially critical given how few programs provide direct financial support to new parents.

Our randomized control study will give low income mothers $4,000 in unconditional income for each of the first three years of their child’s life, starting at birth. The comparison group will also receive a cash gift, though at a much lower amount. The income boost that the experimental group will receive was carefully chosen; based on evidence from prior randomized studies, this amount of basic income showed positive changes in school-aged children’s cognitive development. Plus, the income boost nearly matches a variety of existing policies, such as the earned income tax credit. Mothers and their infants will be followed for three years with a survey in year one, a home visit in year two, and in year three a visit to university labs to measure maternal well-being and children’s brain functioning and development. The cash will be disbursed monthly on a debit card.

Will income alone be enough?

The general idea of unconditional income isn’t a new one. Conversations about basic income are increasing worldwide (for instance, efforts in Kenya, Finland, and the U.S.). The hope for a basic income, or variations therein, is that would be a more efficient means of providing economic cushion to individuals. The debate about the impact of a basic income are similar to the debates about poverty reduction: will income alone be enough? Are there too many other factors associated with low income that are the actual drivers of outcomes?

In addition, much, if not all, of the discussion and creative design of basic income essentially ignores children and the context of their lives. Our study is the first to position the question and the research from the lens of children’s development and the consequences of early childhood poverty.

Can increasing income at birth increase the odds that children escape poverty?

How can a basic income early in a child’s life alter their lifetime trajectory? First, enhanced income can enable parents to invest in themselves and their children; second, enhanced income can reduce economic stressors and support more responsive parenting; and, finally, income can reduce the mental drain of poverty.

Scholars and policymakers are not currently positioned to see or respond to the double-depleting demands of poverty and the types of responsive, warm, and nurturing parenting that research shows is best for children. Living in poverty can be victimizing, stigmatizing, and mentally exhausting for any individual. Parents not only have to take care of themselves and their children but also juggle money, time, and available mental resources, with high demands on all three.

The irony is that many existing early childhood solutions ask these same (money, time, and mental resource drained) parents to be attentive, energetic, and responsive to their children day to day with little relief from their other responsibilities.

Infusing behavioral science into the design of “basic income” for parents of infants

Poverty and parenting are notoriously unpredictable; parents who are poor never know where the next disaster or opportunity will come from, and so they must stay on high alert. Chronic alertness is stressful and draining. To address this, a key characteristic of our study is that payments are regular and predictable. Reliable income should alone alleviate some of the drain of parenting in poverty.

Our program isn’t the first to add reliability and predictability; many existing public benefits arguably have these features too (e.g., food stamps). However, unlike previous programs, we added four additional behavioral-design features. These design features address the time, money, and mental resource constraints of poverty.

Monthly vs lump sum. The cash gift will be disbursed monthly, not annually as a lump sum. Lump sums tend to require budgeting and financial planning, which add to parents’ cognitive burden. In contrast, we expect a monthly payment will reduce cognitive load. Mothers may accumulate the monthly disbursement for big-ticket items or rainy-day funds (behaviors seen in the context of receiving the lump sum from earned income tax credits) or use it to cover day-to-day expenses or emergencies (like purchasing diapers and similar behaviors seen in a pilot study of 30 mothers we conducted about two years ago).

Disbursement on the infant’s day of birth date. The monthly disbursement will be uploaded to the mother’s debit card on the day of the child’s birth date. Here, we design around the cognitive bias of the anchoring effect, cueing mothers to associate the cash gift with their baby’s birth and thus expenditures or investments that are directly for, or for the good of, the baby (that includes, by the way, the mother using the cash gift for herself or the family). We do, however, foresee a potential flaw in this tactic: mental accounting might lead to an inefficient outcome. That is, mothers might spend on an item or save for the baby when the money might be better put toward paying off debt. We will seek an empirical answer.

Reminders of cash upload and inactivity. Parents will receive a text notification when the money has been added to their debit card. The texts will also notify parents if the account has been inactive and will remind parents of the existing balance on the card. The power of reminders to redirect attention has been widely shown across many domains, including health, the environment and financial savings. We’re lucky to be working with a debit card company that has these reminders prescheduled and automated.

Meeting parents where they are. Meeting parents where they are does two things. It not only drives our motivation for testing the basic income in the first place but also informs the strategies by which we are conducting our research. Interviewers who will be recruiting mothers from hospitals are from the mother’s local community. Correspondence and interactions with mothers and their infants will be personalized as much as possible.

These behavioral principles won’t eliminate all of the effects of economic disadvantage, of course, but we believe that they will help us get a clearer picture of how to approach a problem as complex as poverty. We hope that in the next several years we’ll better understand how to increase the odds of those 2.6 million infants and toddlers born into poverty rise out of it.