A University of Michigan-led study, based on data from over 140 countries, shows that government-funded cash transfer programs for children improve their health. The findings, published in The Lancet, highlight these programs as a smart way for nations to boost public health and economic growth.

The study makes a strong case for child cash transfers as a tested and effective tool to reduce poverty and improve health outcomes. “These programs are not experimental,” the researchers explain. “They’ve been working for years in many countries. In the U.S., the expanded Child Tax Credit in 2021 showed similar success, cutting child poverty to a historic low of 5.2%.”

A strong foundation

UNICEF calls unconditional cash benefits for children the foundation of social development. These programs typically provide families with regular cash payments, which studies show lead to:

• More stable household incomes, better food and housing security.
• Reduced stress for caregivers.
• Increased spending on children, like better home learning and healthcare access.

Growing up in poverty increases the risk of adversity and poor health, while healthy children are more likely to do well in school and work, ultimately benefiting the economy and reducing healthcare costs.

Clear evidence

In the U.S., the expanded Child Tax Credit was a clear example of how such policies work. But after it ended, efforts to revive similar programs shifted to state and local levels.

One example is Rx Kids in Flint, Michigan. It gives all pregnant mothers $1,500 with no strings attached, plus $500 a month during their baby’s first year. Over 1,200 families have signed up, and by the end of 2024, the program will have distributed $5 million.

Early results are promising: families report feeling more secure in their housing and food access, and mothers report better mental health, including less postpartum depression. Plans are in place to expand the program to other Michigan cities in 2025.

The takeaway is clear: cash transfer programs work. They help children thrive, ease family stress, and strengthen societies. For policymakers looking to improve lives, investing in kids through cash is a proven solution.