Can giving parents cash help with babies’ brain development?

The face and shoulders of a smiling baby lying on its back atop a background of $100 bills.
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A new study suggests that regular cash payments to parents can speed up brain activity in infants.

2021 featured a remarkable policy experiment in the United States. On July 15, the federal government began sending monthly checks to parents for up to $300 per child. The checks phased out for top earners but otherwise had no strings attached. Parents could use the money however they wanted. It was a policy that is common in other countries but had never been tried before in the United States.

Debate over the bill tended to focus on its effect on parents. Detractors worried that the measure would deter parents from working, while supporters argued any blowback on labor would be minimal. But an equally if not more important question came up less often: What does the expanded child tax credit mean for children?

A new study suggests that direct cash payments like the tax credit might meaningfully alter the neurological development of newborns in families that receive the money. The paper, published today in the Proceedings of the National Academy of Sciences (PNAS), examines an experiment called Baby’s First Years that has been giving one group of hundreds of low-income mothers $20 per month for several years, and has been giving another group $333 per month over that same period. The experiment hopes to explore the neurological effects of large-scale cash transfers on the development of young children, akin to those conducted in 2021 through the child tax credit.

The PNAS paper, the first to come out of the Baby’s First Years experiment, compares brain wave activity in infants in households receiving $20 per month to infants in households receiving $333 per month. What they find 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 a co-author of the new 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.

Katie McLaughlin, a professor of psychology at Harvard not involved in the study who studies brain development in children, told me the PNAS paper is “maybe one of the most important papers to come out on the effects of early adversity on early development broadly, and brain development in particular.” Allyson Mackey, a professor of psychology at the University of Pennsylvania not involved in the study, agreed and argued the changes to brain wave patterns were highly significant: “My prediction is that the brain effects of cash transfer will grow as kids grow up.”

The paper is especially relevant as Congress debates reauthorizing the expanded child tax credit. “This is the first study showing a monthly cash payment having a causal impact on kids,” Noble told me. And 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.”

Poor children did nothing to deserve being poor — and by making them less poor, cash payments seem like they may alleviate some of the developmental harms of poverty.

Two mothers stand, each holding a baby. One woman carries a sign that reads “Congress must continue the child tax credit!”
Alex Wong/Getty Images
A pair of mothers and their babies join a rally in front of the US Capitol in December to urge the extension of the expanded child tax credit.

Brain waves, explained for babies (and other non-neuroscientists)

I have written a lot about cash programs, especially cash programs for parents, but I’m a policy journalist, not a neuroscientist. So my big questions when I first heard about the PNAS study were: What is a brain wave? And why should I care if it’s fast or slow?

This is the very, very simplified answer I got from Noble: one way that neurons in your brain communicate with each other, transmitting instructions and information, is through electrical signals. Some of these signals are sent at a very rapid pace; some are sent more slowly. Neuroscientists use Greek letters to distinguish slow from fast brain activities; “delta waves” are the slowest signals detected in the brain; “gamma waves” are the fastest.

For nearly a century, researchers have used a technique called electroencephalography (EEG) to measure brain waves by placing electrodes on the scalp that can respond to electrical activity in the brain. One innovation of the Baby’s First Years study is conducting EEGs in infant’s homes, rather than in a lab, which might be unfamiliar and stressful. Sonya Troller-Renfree, a post-doctoral fellow at Teachers College and the study’s lead author, helped to pioneer infant-friendly protocols for such research by using a portable EEG cap that babies can wear in their homes. Troller-Renfree wasn’t at liberty to share photos for this article, but she showed me a few privately; the EEG hats look like swim caps, or tight-fitting winter hats, with straps you can fasten around the chin.

Going into the study, the authors hypothesized that they would see more high-frequency brain waves in babies whose families received substantial cash. That might indicate that the babies’ cognitive functions are developing more quickly. “On average, several higher-order skills, things like language development, tend to be associated with more of that fast brain activity,” Noble said. “Infants and toddlers with more of that fast brain activity often develop more verbal proficiency, higher social/emotional skills, other forms of cognitive skills.”

What cash does to baby brains

The Baby’s First Years experiment began in 2018 with a cohort of new mothers; the experiment recruited participants in hospital maternity wards in New York City, Minneapolis/St. Paul, Omaha, and New Orleans, screening specifically for mothers with low incomes. The newly released study is based on EEGs of 1-year-olds conducted in 2019. In 2020 and 2021, the researchers behind the experiment suspended in-person data collection due to Covid-19; they judged it not safe for survey-takers to visit private homes indoors. They’re hoping later this year to return to in-person data collection, but as it stands, the only EEG data that exists is for 1-year-olds.

The data confirmed the researchers’ hypothesis: There was more high-frequency brain wave activity in children whose families got $333 a month. The cash seemed to lead to more high-frequency, or fast, brain activity. For the highest-frequency gamma brain waves, the effect size of cash was 0.23 standard deviations, which in education research would be considered a large effect.

That said, almost no research to date, other than studies about Romanian children raised in government institutions and randomized to receive either high-quality foster care or remain in the institution, measured the effects of social policies on infants’ EEG results. It’s just uncharted territory. So comparing to the effect size of, say, pre-school or tutoring on test scores doesn’t necessarily tell us much.

“We cannot do an apples-to-apples comparison because we do not have brain waves data for other interventions,” Katherine Magnuson, a professor in the school of social work at the University of Wisconsin and another co-author on the study, told me. Lisa Gennetian, a professor of public policy at Duke and another co-author, chimed in after Magnuson: “There isn’t another apple. There isn’t even an orange.”

But Noble stressed that the brain wave activity here at least correlates with outcomes later in life in other studies. Romanian children raised in institutional care had more low-frequency brain activity, and less high-frequency brain activity, and also were likelier to show ADD or ADHD behaviors later on. Prior studies looking at EEG scans of infants and toddlers have found that the rate of high-frequency gamma brain waves is correlated to better language abilities and memory later in the child’s life. Those results aren’t necessarily causal; it’s not clear that having different brain activity causes, in some sense, better language abilities later on. But the fact that they correlate is at least suggestive that children with fast brain wave activity whose mothers received the high cash gift might have better developmental outcomes in the future, too.

Why? The study was not equipped to determine which of these mechanisms were most important, but it’s not hard to imagine mechanisms by which cash for parents could help children. “My first hunch is that you’re reducing parental stress and giving parents more bandwidth, time, and emotional and cognitive energy to be spending with their kids,” said McLaughlin, the Harvard psychology professor.

But what’s exciting is that because Baby’s First Years is a randomized experiment — meaning that the only systematic difference between the two study groups was how much money they received — we can be reasonably confident the cash is a primary cause of these changes in babies’ brains. And we can be reasonably confident it will be a causative factor in whatever future outcomes the Baby’s First Years researchers find.

“Ten years from now, this will not be the only or the most important finding,” Magnuson told me. There’s plenty more the study is about to learn about what cash payments, similar to those the Biden administration pioneered, do for the development of young children.

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