Cash Stipends Could Lead to Positive Brain Activity in Kids, Sparking New Child Tax Credit Discussions

young mother holding her newborn baby, while sitting in a rocking chair.
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People may, intuitively, feel that children born to parents with money have certain advantages in life. But a new study has discovered a potential link between money and brain activity in babies. Research shows a cash stipend given to new mothers increased brain activity in the children participating in the study. If these results bear out over time, the data may have an impact on economic policy.

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The study findings were analyzed this week in the Proceedings of the National Academies of Sciences, with the group being studied including 1,000 mother-infant pairs living below the poverty line. One control group received $20 while the other group received $333 in monthly payments, which will continue until the child is “at least four years old.”

Study of the infants’ brain waves suggest the potential for stronger cognitive development in the group that received the larger payments. However, the changes were modest, the researchers reported. The New York Times framed the results as something like moving from the 81st position in a line of 100 people up to the 75th position. Further, there is — as yet — no proof that the increase in brain activity will translate to higher cognition later in life.

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However, University of Pennsylvania neuroscientist Martha J. Farah is optimistic. “It’s proof that just giving the families more money, even a modest amount of more money, leads to better brain development,” she told The NYT.

However, the research could be used as a catalyst to revive discussions and debate regarding the advance child tax credit, which expired in December 2021. The program gave up to $300 per child, per month, to families earning less than $150,000 per year for married couples, filing jointly.

Virtually everything about the policy, from the amount of money given to which families should receive it — and if there should be attached conditions, such as work, tied to the money — has been under debate since last year.

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Charles A. Nelson III of Harvard said cognitive testing will be required before conclusions could be made regarding the effect of cash on infant brain development. “If I was a policymaker, I’d pay attention to this, but it would be premature of me to pass a bill that gives every family $300 a month,” he said of the study, per The NYT.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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