Saturday, May 16, 2009

Income Transfers and Child Health

A recent VOX paper argues for the efficacy of well-designed income transfers in promoting child health. How much should 0.07 of a standard deviation on things like maths scores be viewed as a success for a policy that costs so much money. If improving child test scores and mental health among poor children is the aim, how does such success compare, for example, to direct family based interventions?

"First, we find that an extra $1,000 of child benefits leads to an increase of about 0.07 of a standard deviation in the math scores and the Peabody Picture Vocabulary Test, a standard measure of language ability for young children ages four through six.
These findings are of the same magnitude as the Dahl and Lochner (2008) study mentioned earlier, which helps to corroborate their result.

Second, we examine the impact of child benefits on indicators of mental and emotional wellbeing using standardised psychometric scores available in the NLSCY. We find that more child benefit income leads to lower aggression in children and decreases in depression scores for mothers.

Finally, for physical health we find little evidence of improvements related to increased child benefits—although we do find a decrease in families reporting their children have been hungry due to lack of food."

The general issues on parental transmission are teased out well in the paper below by Currie

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