When a Basic Income Matters Most

A healthy debate is emerging over the role of a basic income in supporting workers as our economy undergoes profound changes. Efforts to advance basic income have focused on its role in buffering workers’ needs from growing automation and the ‘gig’ economy, with far less attention paid to the possible benefits for the children in these workers’ families. Today’s children, after all, are tomorrow’s workforce, and we need to build as much brain power and unleash as much creativity in them as possible.

Recent advances in neuroscience suggest that experiences early in life can have a profound and enduring influence on the developing brain. Family income shapes the nature of many of these experiences. Yet despite hundreds of studies of early childhood preschool and parenting programs, we know surprisingly little about the extent to which income itself is an active ingredient in children’s development very early in life.

Our team of neuroscientists, economists and developmental psychologists is hoping to fill this gap by conducting the first-ever randomized controlled trial to determine whether basic income payments have a causal impact on the cognitive, socio-emotional and brain development of infants and toddlers in low-income U.S. families.

In June 2017, we hope to launch a study in four diverse U.S. communities (New York City, St. Paul, Omaha and New Orleans) in which 1,000 poor mothers of infants will receive monthly cash payments for the first 40 months of the child’s life. Half of these mothers will receive $333 per month ($4,000 per year) and the other half will be given a nominal monthly payment of $20.

We will pay special attention to measures of cognitive and behavioral development when the children reach their third birthdays, because these indicators are such important early predictors of later health and achievement. Specifically, we will assess children’s self-regulation, cognitive, language and memory development, as well as direct measures of brain activity. This study will thus provide the first definitive understanding of the extent to which a basic income plays a causal role in shaping the early socio-emotional, cognitive and brain development of children in low-income families.

What are the pathways by which effects on young children might occur? To understand how parenting and family economic behavior change in response to basic income supplements, we will collect information about parent stress and mental health, parenting practices, family expenditures, employment, as well as child care arrangements. Prior work in this area, much of it in the developing world, tells us that the money will improve parents’ well-being and family environments, and, if anything, reduce alcohol and drug use.

In June 2014 we launched a pilot study at New York Presbyterian Hospital to establish the feasibility of our project. This study included 30 poor mothers of newborns, half of whom were randomly assigned to receive $100/month (smaller payments than in the proposed study), while the other half received $20/month. For a year, money was transferred monthly through a prepaid debit card, with text messages sent out to alert the mothers when money was added. Very few mothers reported difficulties using the card.

When their infants reached their first birthdays, the mothers completed a survey interview with questions about parenting and family expenditures. While the results should be viewed with caution because of the small sample size, we found some evidence that the higher monthly income reduced household chaos and increased mother-child learning activities and child care expenditures. The pilot study suggests that our proposed procedures for enrolling low-income mothers, transferring income to them, and collecting survey information are indeed feasible.

After more than four years of planning, we are very excited that our project is close to liftoff. Grants from a number of foundations, and, we hope, funding from the National Institutes of Health, would cover all but about $4 million of the project’s $16 million cost. We are optimistic that we will be able to close this funding gap before next June, and welcome new partners in this effort. By assessing whether income itself improves family functioning and child well-being, our study will provide powerful evidence on the possible benefits of a guaranteed income in our changing society.

Greg Duncan (gduncan@uci.edu), an economist at the University of California, Irvine, is developing the project with Kimberly Noble, a neuroscientist at Teachers College, Columbia University; developmental psychologists Katherine Magnuson (University of Wisconsin, Madison) and Hirokazu Yoshikawa (New York University); and economist Lisa Gennetian (New York University).