Can alleviating financial strain change how parents interact with their young children?
The East Bay Financial Needs Study explores the psychological effects of financial stress.
Kristina Hallez (Program Manager, Health and Psychology) shares information about the launch of the East Bay Financial Needs Study, a demonstration project supported by CEGA’s Psychology and Economics of Poverty (PEP) initiative, J-PAL North America’s Social Policy Research Initiative, and the Russell Sage Foundation.
Financial scarcity isn’t just about lack of material resources — it can also generate mental burdens for parents, inducing worry, stress, and depression (Haushofer & Fehr, 2014; Mani et al., 2013). For example, recent research suggests that parents tend to speak less to their children at the end of the month, when bills are typically due (Ellwood-Lowe et al., 2022). The ongoing COVID-19 pandemic may exacerbate the adverse effects of financial scarcity, potentially increasing parenting stress and undermining parent mental health, which can lead to more negative interactions with children (Chung et al., 2020). The new East Bay Financial Needs Study aims to better understand whether the psychological experience of poverty leads parents to engage less with their young children and test whether the short-term alleviation of financial scarcity can impact parent–child engagement. Our study will involve a cash transfer intervention and collecting rich data around parents’ verbal interactions with their children, which differ markedly by household socioeconomic status (SES) in observational data and are the most prominent proxy for parental engagement in developmental psychology.
Measuring interactions using day-long at-home audio recordings
The first stage of the pilot will involve 100 households in the East Bay of the San Francisco Bay Area, who receive CalFresh (California’s Supplemental Nutrition Program) with one child between the ages of 18 and 30 months old. We focus specifically on households with infants in a developmentally crucial stage in the first few years of life, when brain development is most rapid. Participating households will be randomly assigned to one of two groups:
- High cash group — Households will receive a one-time unconditional $400 cash transfer during the third week of the month. For reference, a person working 40 hours at California’s minimum wage ($14/hr) would earn $560 a week. Further, the transfer amount is almost 80% of the maximum monthly CalFresh benefits for a three-person household.
- Low cash group (control) — Households will receive a $5 cash transfer.
Over the course of one month, households will be asked to complete baseline surveys with questions about demographics, finances, and mental health measures as well as brief daily surveys about their emotional affect, financial rumination, harmony between adult partners, and engagement in activities with their child. Twice during the month, parents will also be asked to make day-long audio recordings of the sound environment around their child at home using LENA devices. LENA is a portable audio recorder that can be placed in children’s shirt pocket, with built-in validated speech algorithms that are the current gold standard for measuring parent-child conversations in developmental psychology. LENAs can automatically calculate “conversational turns” or vocalizations that alternate between a child and adult speaking to each other within a five second interval. Conversational turn counts have been found to be strong predictors of children’s verbal test scores and brain development (Merz et al., 2019; Romeo et al., 2018). We will also obtain the number of words produced by adults as well as the number of words/vocalizations spoken by the child.
Survey measures will be used to assess parents’ emotions, cognition, and mental and relational well-being. We aim to supplement audio recordings with measures of affect by analyzing voice tones or positivity/negativity in parent-child interactions and parent’s interactions with other adults. This will provide insight into more general aspects of family dynamics. Moreover, by analyzing characteristics of child and parent speech patterns, we hope to develop measures that correlate with psychological channels such as rumination and depression to inform future work.
We hypothesize that alleviating financial strain, even in the short-term through a direct cash transfer, may increase parents’ mental capacity to engage more actively with their children in measurable, beneficial ways. With this pilot project, we hope to begin tracing a causal chain that can have important policy implications; namely, whether direct cash transfers may impact human development through psychological channels that affect parental interaction with their children.
