Giving kids a monthly allowance isn’t just good parenting — it could be good government.
A new study from King’s College London makes a strong case that giving families a set amount of money each month to use toward childcare — essentially a basic income for kids — could have profound implications for how disadvantaged children turn out as adults.
According to the study, which comprised more than 1,000 people tracked from ages 3 to 38, certain markers of early brain health can predict with startling accuracy which kids would sink deeper into poverty as adults, develop drug addictions, and commit crimes.
If the kids’ parents had been able to provide more secure households (like with a basic income), the research suggests, the subjects whose brain health declined might have been guided toward healthier, brighter futures.
Clinical psychologist and co-author Terrie Moffitt says about 20% of the population uses 80% of the money given to public assistance services — a version of the Pareto Principle, which states that 80% of a system’s output usually comes from 20% of its parts.
Basic income supporters view those kinds of imbalances as evidence that strengthening the social safety net is a win for everyone. If there is less of a need for public assistance programs, people won’t need to pay as much in taxes to support them. Plus, the addition of all those people to the workforce means greater economic output and spending.
A childhood basic income isn’t unheard of. In at least 10 countries, including Canada, Sweden, and the Netherlands, the government hands out money to couples who have kids. They’re known as “child allowances” or “universal child benefits.” The money reflects an understanding that raising kids is tough, expensive work. And no one checks the parents’ income to make sure they qualify for the allowances either. The benefit is universal.
The research on basic income more generally hints at some lasting benefits. There is no data on first-world populations, but developing-world data (in places like Kenya and Honduras) reveal people enjoy lower stress levels and greater happiness when they can pay for a new roof or start a business. Recent data finds people buy drugs and alcohol less often as well.
Russ Whitehurst, a senior fellow in economic studies at the Brookings Institution, has found through his own research that direct cash transfers to families and subsidies like daycare vouchers also trickle down to benefit kids. Specifically, they lead to higher youth achievement than nearly every other form of intervention, including popular programs like Head Start, Pre-K, and a push toward smaller class sizes.
According to Whitehurst’s research, kids whose parents got money straight from the government, in the form of a big tax refund known as the Earned Income Tax Credit, did better on standardised tests as early as third grade and as late as college compared to similar kids in the other programs.
Whitehurst says it’s easy to see why.
“If you’re bringing home $21,000 and the government gives you another $3,000, that can be a big deal,” he told Business Insider in August. “It can allow you repair your car when it breaks down and you need it to go to work. It can allow you to make a rent payment that, if you missed it, would mean having to change homes or being homeless.”
The newest research suggests extra money might not just mean better grades, as Whitehurst’s research finds, but improved health and lower odds of breaking the law. “This study really gives a pretty clear picture of what happens if you don’t intervene,” Moffitt told the Telegraph.
And based on the early available research, basic income gives a clear picture of what happens when you do.
Business Insider Emails & Alerts
Site highlights each day to your inbox.