Alaska’s Universal Cash Transfer Improves State’s Child Welfare

1 min read
October 7, 2023

Big picture on cash transfers

Direct cash transfers in the early stages of a child’s life, such as Alaska’s Permanent Fund Dividend (PFD), have been revealed in a NBER working paper (Effects of Universal and Unconditional Cash Transfers on Child Abuse and Neglect by Lindsey R. BullingerAnalisa Packham & Kerri M. Raissian) to profoundly impact child welfare. This discovery is another perspective on the benefits of direct cash transfer programs .

Why it matters: With rising concerns about child welfare, it’s crucial to identify effective interventions. This study shines a light on one such intervention.

What They Found:

Immediate Child Welfare Benefits: By disbursing an additional $1,000 via the PFD during a child’s early months: The odds of a child being referred to Children’s Services drops by 2%.

  •  Moreover, there’s a decrease in the likelihood of child mortality.
  •  Notably, the risk of maltreatment for children aged 0–3 reduces, with 90 fewer cases reported during the study.

Balancing Costs and Benefits: On the economic front, it’s enlightening to see the CDC’s calculations. They estimate that the lifetime costs evaded due to less maltreatment hover around $18.9 million. Meanwhile, the expense of disbursing the additional cash is a comparatively modest $4.5 million.

  • Stability at Home: Another intriguing find is the increased family stability. With the PFD’s assistance, children are more likely to live with their mother by age three.
  • A Peek into Food Security: Delving into food security, the PFD seems to influence decisions. While there’s a decline in enrollments in the Women, Infants, and Children (WIC) program by age three, there’s no shift in participation in the Supplemental Nutritional Assistance Program (SNAP) or food pantry usage.
  • Childcare Choices Shift: Cash can influence pivotal decisions, and childcare is no exception. With an increased PFD, kids are more likely to be cared for at their mother’s or a relative’s home. Interestingly, the duration kids spend in daycares remains unchanged.

So, why are these mechanisms crucial?

  • Household Conditions Matter: A boost in PFD amounts cultivates improved living conditions. For instance, there’s a decrease in families moving around, creating a more stable environment for children.
  •  Feeding the Future: Food security is undeniably vital for nurturing healthy kids. So, understanding how cash transfers and food access intertwine becomes imperative.
  •  Decoding Childcare Decisions: Childcare decisions can leave lasting impressions on a child’s well-being. This research underlines the potential of cash transfers to steer these choices positively.

The broader context about cash transfers:

Drawing from this research, one can infer that future policies surrounding unconditional cash transfers might be revolutionized. Specifically, direct financial support in a child’s early years can yield tremendous societal advantages.

The takeaway:

As a cash transfer program, Alaska’s PFD stands as a beacon of hope, indicating promising positive outcomes for children. If implemented more broadly, similar initiatives could reshape child welfare narratives nationwide.

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