STACEY VANEK SMITH, HOST:
Welcome to THE INDICATOR, where every day we tell you a short story about the economy. I'm Stacey Vanek Smith.
CARDIFF GARCIA, HOST:
And I'm Cardiff Garcia. On the show today, a fascinating and super ambitious new experiment has just launched after six years of careful design by a team of economists, neuroscientists and other scholars. Economist Lisa Gennetian is one of the lead researchers on the study, and she says that all that work is actually to answer a pretty basic question.
LISA GENNETIAN: What is the causal impact of income on children's development and brain development?
VANEK SMITH: And specifically, what happens when you give a few hundred dollars a month to a new mother who lives near or below the poverty line - money with no strings attached that she continues to receive for the first three years of her baby's life? Does that extra income improve the brain development of her child during that time?
GARCIA: There's already a lot of data showing that kids from households in poverty do worse in school and don't perform as well on tests of their cognitive ability. But proving whether low incomes are the cause of that underperformance has never actually been tried - not for kids this young. Kim Noble, a neuroscientist and another one of the lead investigators on the study, says this leaves a big void in what we know.
KIM NOBLE: There are people who would say, well, it's not poverty. It's one's willingness to pull oneself up from one's bootstraps, for example.
VANEK SMITH: So establishing the relationship between income and development is fundamental for the way we should think about families in poverty with young children. This experiment is right on the cutting edge of ideas in both economics and brain science, and it could even inform the way policymakers approach the issue.
GARCIA: Lisa Gennetian says there's already a lot of research about the effects of parental income on how their kids develop. But this study she's been working on for six years is going to fill two big gaps. First, those earlier studies focused on kids' development starting at ages 3 and older.
GENNETIAN: We don't know anything from any of those studies about these important first three years of life that we've also learned in the last decade are super important.
VANEK SMITH: And second, those earlier studies looked at the effects of income that was conditioned on some behavior by the parents. So the parents would get benefits if they got their kids immunized or if the kids did well in school.
GENNETIAN: So we also don't know if families had cash unencumbered, unconditioned, how would it empower them, enable them?
VANEK SMITH: The effects of unconditional cash transfers, or to use normal language, just giving people money - this is something that has increasingly interested economists in recent years. And the question that this study wants to answer is what happens when you just give money to new moms and then let them decide how to spend it?
GARCIA: Well, a study about the effects of just giving new mothers more money first needs some new mothers to give the money to, and specifically, a thousand mothers with incomes that are near the poverty level or below it, says Kim Noble.
NOBLE: Mothers will be recruited in the postpartum ward, so within a day or two of having given birth. We'll be recruiting a thousand low-income mothers from a number of hospitals around the country.
VANEK SMITH: The researchers have partnered with hospitals in four American cities. They'll be recruiting these new moms throughout the next year. And there's a reason that this study about the effects of giving mothers a higher income begins right at the start of a child's life.
NOBLE: Emerging evidence is suggesting that the developing brain is most malleable to experience early in childhood, so it's the time period when you would expect to find the biggest bang for your buck, as it were.
VANEK SMITH: If a mother says, yes, I will participate in this study, then researchers will give her a debit card before she even leaves the hospital. Cash will be uploaded onto that debit card every month for the next three years and four months. And she can spend that money however she wants.
GARCIA: Of the thousand mothers in that study, about half will be randomly chosen to receive only $20 on the debit card each month. They're kind of like a control group. The other half will be given a much bigger amount - more than $300 a month. And for a household of three at or below the poverty level, that could be a 15 to 20 percent boost to their income.
VANEK SMITH: And this is money on top of whatever income or government benefits these mothers already get, like welfare or food stamps. And the cash gift is non-taxable.
GARCIA: There's a simple hypothesis here. The kids who are born to mothers who get hundreds of dollars a month should end up performing better on cognitive tests than the kids whose moms get just 20 bucks. And if so - if that proves true, then it's very likely that the higher income caused that improvement because the mothers were chosen at random to receive it.
VANEK SMITH: So the moms walk out of the hospital with their debit cards. And then, Kim says, the researchers go to work observing the effects of this extra income. They'll do phone interviews with the mom and visit the moms in their homes. And when the kid turns 3, the family will go into a lab for a comprehensive test of the child's emotional and brain development.
GARCIA: And to study the effects of income, the researchers will actually be looking at changes in different parts of the brain because, Kim says, different parts of the brain are responsible for different functions, things like vocabulary and self-restraint.
NOBLE: For example, showing children a group of pictures and saying, you know, point to the spoon or point to progressively more complicated vocabulary words, and so you get an assessment of the child's vocabulary.
In terms of self-regulation skills, there are tests, for example, where, you know, you might say, I'm going to show you some pictures of animals on the screen. I want you to press this button for every animal, but, oh, don't press it for the monkeys. So every other animal, press the button, but don't press it for the monkey.
GARCIA: This is where the researchers can also take advantage of newer technologies, Kim says, especially when the kids turn 3 and come to their labs, so they can actually look at activity happening in the brain itself.
NOBLE: We have other tools in the toolkit. For this study, we'll be using electroencephalography, or EEG, which is basically...
GARCIA: Like, those things that you attach to people's heads and stuff?
NOBLE: Yeah. It's a net of electrodes that looks like a cap.
NOBLE: And we say to the child that they're going to be wearing this cap. You know, they can be sitting comfortably in a chair or on their mother's lap.
And we are able to - it measures electricity at the surface of the scalp, which reflects the underlying electricity of the brain. And so by looking at different patterns in that electrical energy in different locations, we can have a sense of the underlying brain function.
GARCIA: And the researchers will use these tests to see if extra money given to the moms actually made a difference in how well their kids perform on the tests.
VANEK SMITH: And during that time, the researchers will be able to gather information about the home environment - things like the complexity of the language that a child hears at home, says Lisa.
GENNETIAN: We can also do things like get audio recordings of language right in the household, which that technology didn't exist even five or six years ago in the way it is mass-marketed now. And so...
GARCIA: Do you use, like, an Alexa?
GENNETIAN: It's actually...
GARCIA: Do you use, like, a special - do you have, like, your own version of Alexa?
GENNETIAN: It's not - yeah, yeah, yeah. It's not so different. It's not so different. They have these great little recorders and a cute little vest the baby can wear. And families usually forget that it's on.
GARCIA: Because it looks like a - it looks like just a pin or something that's decorative - like a decoration?
GENNETIAN: It's just a little recorder...
GENNETIAN: ...Two inches by three inches.
GENNETIAN: And it fits in specialized clothing that the child wears.
VANEK SMITH: Plus, they'll be getting hair samples from the moms and the kids to measure their stress levels. Apparently, you can measure people's stress levels by looking at their hair.
GARCIA: Isn't that amazing?
VANEK SMITH: Yeah, that's amazing. They'll also be recording changes in the weight of the mothers and asking them questions about their nutrition choices. And finally, they won't know what the moms are actually buying with the debit cards, but they will be able to see how quickly the money is spent down or whether it's saved.
GENNETIAN: At each of these points, when we go to speak to the families, we are going to ask them very specifically, you know, what are you spending on things around the child?
You know, diapers is a theme that comes up over and over again with low income families in the first years of life 'cause remarkably, our country doesn't have a diaper subsidization program. It's probably the most expensive item.
GARCIA: The main thing being studied is, of course, the effect of higher income on a young child's development. But the researchers also want to start gathering data on all the other really big questions that they can then research in the future, like, for instance, will the new moms whose incomes go up choose to work less and maybe spend more time with their kids? Will they use the money to go back to school and maybe invest in themselves?
VANEK SMITH: Also, will they be more likely to place their kids in child care? Will they be less stressed? Will they have better relationships with their kids' fathers? Will the higher income affect their decisions about breastfeeding?
GENNETIAN: So there's, like, another theme here, which will be really interesting around stability of the environment for the child that we're hoping we can say something about.
VANEK SMITH: Lisa says a lot of policy ideas right now look at spending money on things like early education and childcare, and that is just not going far enough.
GENNETIAN: And those are all promising approaches, but they kind of are uncoupled from thinking about, well, what's going on economically with this family?
GARCIA: So the causal impact of higher incomes on the brain development of babies and toddlers is an issue that has been underexplored for a while, Lisa thinks. This study is an attempt to change that.
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