Cash Transfers

Cash transfers can reduce child poverty, narrow racial disparities in poverty, and have positive impacts on household resources and child and parent health. Most rigorous research to date has studied monthly and annual payments, totaling approximately $1,000 to $3,600 per individual or child annually. However, although the evidence is clear that cash transfers benefit children and families, the evidence base does not provide clear guidance on the optimal amount and frequency of monetary assistance, as well as whether transfers are most beneficial when targeted to specific populations or provided universally.

Cash transfers are direct monetary payments to individuals or families. Although they can take many forms, the central goal is to prevent or mitigate poverty. Unlike most peer countries, the US does not provide recurring payments to all individuals or families with children. Support for cash transfers in the US, however, gained public attention following the 2021 temporary expansion of the federal child tax credit (CTC), which lifted an estimated 2.1 million children out of poverty.

Beyond potential reductions in child poverty, research suggests cash transfers can reduce racial disparities in economic wellbeing and improve household resources, child health and development, and parent health. Because cash transfers vary by design, we separate evidence into different categories of cash transfers to identify the most promising policy design based on the varying impact on the prenatal-to-3 period.

Download the Complete Evidence Review

Cash Transfers Evidence Review (PDF)

Download the 2-Page Summary

Summary of the Rigorous Research on Cash Transfers (PDF)

Recommended Citation:
Prenatal-to-3 Policy Impact Center. (2024). Prenatal-to-3 policy clearinghouse evidence review: Cash transfers. Peabody College of Education and Human Development, Vanderbilt University. https://pn3policy.org/policy-clearinghouse/cash-transfers

Updated October 2024