Cash Transfer Programs and Children’s Health

Interest continues to grow in cash transfer programs that provide money directly to individuals and families. A recent Health Affairs policy brief examines what we know about these programs and their effects on infant and child health outcomes, where the evidence is strongest, and what policymakers should consider moving forward

Here are key takeaways from the brief written by LDI Fellows Aditi Vasan and Meredith Matoneand their CHOP PolicyLab colleagues Rebecka Rosenquist and Jordan I. Wood

Cash transfers provide individuals and families with direct financial support to meet their most pressing needs. Unlike in-kind assistance, cash transfers allow recipients to decide how best to spend the funds based on their own circumstances

Many existing federal and state benefits already function as cash transfers. Programs such as Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), the Earned Income Tax Credit (EITC), and the Child Tax Credit (CTC) provide cash directly to eligible families. Other programs, including the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and the Supplemental Nutrition Assistance Program (SNAP), provide monetary benefits designated for specific needs.

Some programs primarily serve low-income families, while others, such as the EITC and CTC, reach a broader range of U.S. households

Beyond traditional government benefits, a growing number of state, local, and pilot programs provide unconditional cash assistance to families during pregnancy and early childhood

Examples include Rx Kids in Michigan, The Bridge Project in multiple cities, Magnolia Mother’s Trust in Jackson, Mississippi, and Philly Joy Bank in Philadelphia. Most rely on philanthropic funding, although some, such as Rx Kids, also receive state support

Research on both the EITC and CTC shows consistent improvements in families’ economic security and children’s long-term outcomes. Families receiving expanded CTC payments report using the additional income for child care, health care, food, utilities, savings, and other essential needs. Studies show that the EITC:

• Lifts millions of families out of poverty each year.
• Reduces housing cost burdens for low-income households.
• Is associated with caregivers being more likely to work.
• Improves children’s future earnings and reduces their likelihood of living in poverty as adults.

Measures of health improved, and deaths among women and children fell significantly in cash transfer programs in low- and middle-income countries, international research shows. However, important differences in the U.S. context may limit the applicability of these findings. Although the U.S. evidence base on health outcomes is growing rapidly, questions remain

In the U.S., a randomized controlled trial of Baby’s First Years found no improvements in child health or developmental outcomes from cash transfers to low-income families during the first four years of childhood. Similarly, a study of infants who automatically qualified for SSI based on low birthweight found no improvements in health or educational outcomes through young adulthood

In contrast, multiple studies of the expanded CTC found small but statistically significant reductions in adverse birth outcomes, including preterm birth and low birthweight, when payments were received during pregnancy. Other research has linked the expanded CTC to short-term improvements in children’s behavioral health, caregiver mental health and well-being, time spent with children, and household food security.

Emerging evidence from local and pilot mother-infant cash programs also points to potential benefits, including improvements in material hardship, prenatal care use, birth outcomes, postpartum depression, child maltreatment investigations, and economic stability. However, evidence on these programs’ long-term effects on children’s health remains limited

Recent research found no increase in parental substance use among recipients. Researchers note that more work is needed to understand how best to support caregivers with substance use disorders. Studies evaluating the expanded Child Tax Credit and the Baby’s First Years program found no evidence that recipients were less likely to participate in the labor force

Replacing proven health-promoting programs such as WIC and SNAP with cash transfers alone is not recommended. The greatest benefits are likely to come from combining cash assistance with other evidence-based supports for families

The brief, “Cash Transfers And Child Health In The US: What Is Known And What Questions Remain” was published in Health Affairs on July 16, 2026 by Aditi Vasan, Meredith Matone, Jordan I. Wood, and Rebecka Rosenquist

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