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Giving Parents Cash Helps With Babies’ Brain Development – Daily Flash Briefing

January 25, 2022 by Bautis Financial
Giving Parents Cash Helps With Babies' Brain Development

While debates around the child tax credit have mostly focused on incentives for parents, new research highlights the effect of cash transfers for children.

Research published yesterday in the Proceedings of the National Academy of Sciences showed that direct payments to low-income families appear to significantly affect the brain development of newborns.

Here’s how the experiment, called Baby’s First Years, worked: Researchers recruited hundreds of low-income mothers of newborns and separated them into two groups: One group received $20 per month for several years, while the other group received $333 per month over that same period. The difference in income was $3,756 annually.

Over the study period (which is ongoing until the kids reach at least four-years-old), the researchers measured the infants’ brain waves by strapping them into a baby-friendly, brain-scanning cap.

What they found is striking: Babies in houses getting more money show more high-frequency or “fast” brain activity than babies in houses getting less money. That’s a sign that the cash gifts directly changed brain development, according to Kimberly Noble, a professor of neuroscience and education at Teachers College, Columbia University, and co-author of the study. “As kids get older, they tend to have more fast brain activity,” Noble said. “And kids who have more of that fast brain activity tend to score higher” in subsequent tests of cognitive ability.

The researchers say this is a game changer: “This is the first study to show that money, in and of itself, has a causal impact on brain development,” Noble said.

And the paper is especially relevant as Congress debates reauthorizing the expanded child tax credit. While we can debate how handing out cash to parents would affect those parents’ choices, Noble argues that the study “shifts attention to the children, who are blameless in terms of how they got to their life circumstances.”

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Category: Finance News, Personal FinanceTag: Baby's First Years, Child Tax Credit, Child Tax Credit Payments, Finance News, Finance Research
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