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 role of income and the labor supply responses of parents, 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 discusses what existing studies reveal about the impacts of cash aid 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.
- Cash transfer
- Family policy
ASJC Scopus subject areas
- Social Sciences (miscellaneous)
- Economics and Econometrics