New Research Shows Positive Impact of Cash For Moms And Babies

Two new studies reveal that Rx Kids—America’s first community-wide prenatal and infant cash program—is transforming health and economic outcomes for families. The findings, published in the American Journal of Public Health and released by SSRN, offer evidence of the impact of unconditional cash support for families during pregnancy and infancy—a critical window for child development and maternal and infant health. Spotlight spoke recently about the new research with Rx Kids co-director Luke Shaefer, the Hermann and Amalie Kohn Professor of Social Justice and Social Policy and Professor of Public Policy at the Gerald R. Ford School of Public Policy at the University of Michigan. The transcript of that conversation has been lightly edited for length and clarity.

Great to see you Luke and congratulations on all the success Rx Kids is having. I understand there are two new studies out on this work, correct?

That’s right. We have a paper published in the American Journal of Public Health, which is on economic hardship and maternal wellbeing. And then we have a new, preprint working paper that uses large-scale administrative data to look at birth outcomes.

You want to just walk me through those one by one?

Sure. So, just as a reminder, Rx Kids is a community-wide program, not a pilot. Starting in January of 2024, every expectant mom in the city of Flint (Michigan) was eligible for $1,500 during pregnancy and then $500 a month after the birth of their child to age one. We’ve been able to enroll effectively 100% of families in the city, as we know the exact count of how many babies are born because of the birth certificate records. That’s pretty amazing—I’ve never been a part of something where we’re able to get everyone who’s eligible for a program enrolled. We’re now active in a total of 11 communities in Michigan, including six rural counties. And we look like we’re on track to similarly get to a hundred percent enrollment, or something close to that, in these other communities.

So, we don’t do any randomized controlled trials of any kind, but what we can do is compare what’s going on in Flint to what’s going on in other similar communities. The first paper, at the American Journal of Public Health, is based on a survey that was conducted by Hurley Medical Center, the major birthing hospital in the county where Flint is located. They sent out a set of letters to everyone who gave birth at the hospital, which is about 50% of all births in the entire county, and about 70% of births in Flint. The survey did not reference Rx Kids and asked questions about economic hardship—building on, I think, a lot of the great work that we did to learn how to better measure hardship during the pandemic—and then maternal mental health and wellbeing.

And we’re able to compare the responses for families in 2023 who didn’t have access to Rx Kids to families in 2024 in Flint who did. And similarly to moms with new babies from the surrounding region in 2023 and 2024 who never had access to Rx Kids. And we see some really striking relative improvements. The first is on eviction. In Flint in 2024, families are far less likely to be evicted, relative to this analysis, and far less likely to be behind on their rent or mortgage. They’re about a $1,000 less behind, if they are behind at all, and more likely to say that they are able to put the kinds of foods they want on the table.

In terms of mental health, one of the most impressive things we found was this huge reduction in postpartum depression. We see a huge reduction in Flint moms who have access to Rx Kids reporting that they have postpartum depression by the standardized scale. And then a couple things that I really like is we added a couple of questions based on the messaging of Rx Kids. We think of Rx Kids really as the money and the messaging and what we see is big increases in new moms in Flint saying they feel loved, respected, and valued. And I don’t necessarily think you would get that with just any cash transfer program, but from one grounded in these messages of love and support.

As you know Luke, there is new data from the Baby’s First Years cash transfer program that undercuts somewhat the goals of that work. The messaging piece is one major difference between Rx Kids and what they are doing, but are there other differences that you think are fueling your success?

I would say there’s three or maybe four major differences between the two studies and one is I think the messaging. They had messaging in their 4MyBaby program and I think maybe you see that in the impressive parental investments that come out of Baby’s First Years. But I think lost in a lot of this conversation about child development findings is that if you go back and look at their published work, there’s a great quote where they say, this $300 for Baby’s First Years does a better job of leading parents to read to their kids than reading programs usually do. It’s a more effective way, but they don’t see the development.

We, first of all, don’t just sample on families who are poor; everybody in the community gets the benefit. And the messaging really is about uplifting parenting, the importance of the work of parenting. There’s a lot of community events that are involved. Every community that does Rx Kids, the only requirement is that they host a baby parade, which is a wonderful event. We’re getting a hundred percent of people enrolled because it’s a simple program and it’s easy to know if you’re eligible or not. And I think that provides this opportunity to deliver messages that we couldn’t with programs that people never sign up for.

Another really important factor is the prenatal dose. The second paper that we have is all about impacts on birth outcomes. We’re able to look at vital records and we see improvements in Flint in preterm birth. We see improvements in low-birth weight. We actually see increases in prenatal care. We see reductions in smoking in the third trimester. These are all findings that are consistent with the broader literature from other countries and the expanded Child Tax Credit. These aren’t new findings; they’re all things that actually have basis in the research. And they’re all things that Baby’s First Years could have no impact on because they sample after birth.

And then the final thing, which I’m sad about, is that Baby’s First Years never could have predicted this completely historic, unique context that most of their treatment period came during, meaning the pandemic. The first thing that’s historic is that we did more with cash transfers than ever before, and in a very dramatic way. Their control group got significant sums of unconditional cash transfers through the economic impact payments, the expanded Child Tax Credit and expanded unemployment insurance.

And so, the treatment is not what they intended at the beginning. They selected a very modest amount to begin with, but then you add the fact that we have all these cash transfers. And then the second thing is just to build the experiment during a time when, for child development, everything goes haywire. In any event, I think the prenatal dosage is different and the messaging is different. And we learned from a lot of things from what they’ve done.

And did you want to say more about the second study, the birth weight study?

Yes, I think that’s a really exciting study. We have this incredible relationship with the Michigan Department of Health and Human Services that gives us access to the whole universe of vital records and birth certificate data for the state of Michigan. And prior to conducting our analysis, we picked a set of control cities in Michigan that are high poverty and have disproportionately large populations of Black Michiganders—two things that are important for understanding the wellbeing of infants and mothers.

We’re able to look at the trends in these birth outcomes, and we see these very large reductions in preterm births and low birth weights, and we can see in the data, the mechanisms by which those are happening. There’s an increase in prenatal care; moms are entering into prenatal care earlier and going more after Rx Kids is implemented. And smoking goes down in the third trimester too. So, again, I think these results are really exciting. And they also were to be expected because we have a lot of other research that indicates that cash transfers, targeted correctly, can have these types of impacts at birth.

What is your funding runway at this point for Rx Kids?

Another thing that’s unique about Rx Kids is that it’s funded by a mix of philanthropy and TANF dollars. We were able to work with the federal government and in deep partnership with the state of Michigan to utilize TANF through a mechanism called non-recurrent short-term benefits. The state committed funding in a one-time appropriation that will keep Rx Kids going for five years in the city of Flint. We’re in year two of that and have three more years. Rx Kids has also proven to be incredibly bipartisan, and the state legislature has allocated another $20 million in TANF dollars to these other communities.

We have five counties in the upper peninsula, another county in rural Michigan, and a couple of other cities. We only launch if we have two years of funding in place and most of the other places have just launched this year, so we can expect for them to be going for at least two years. (Editor’s note: After this interview was conducted last week, the state of Michigan announced a landmark investment of $270 million to expand Rx Kids.)  

And the changes to TANF by Congress and the Trump administration have not endangered you, at least to this point?

So far, yes. It is also interesting to see a bipartisan interest in supporting families with kids, which goes all the way up to the federal level. Vice President Harris had a $6,000 newborn credit that was actually inspired by Rx Kids as part of her platform during the last election. And President Trump has proposed a $5,000 baby bonus. Those two have different messaging and reasoning behind them but they’re both right in line with what we’re doing with Rx Kids. I think there’s a tremendous amount of support across the aisle for thinking about a policy that would really target in on the, uh, prenatal and the infancy window.

And then finally, have you had interest in other states for adopting Rx Kids?

We have and from a really broad section of states. The state of Washington, in their last budget, didn’t feel like they could implement Rx Kids, but they legislated a planning process to think about a program like this. We’ve testified before the state legislature in Oregon and had many conversations there. And our Dr. Mona Hanna will be going to Mississippi at the invitation of the state legislature, which is really trying to confront their maternal mortality issue. I think in the next few years we’ll have a really diverse set of states operating the program and then that will be the right time to think about some sort of federal version.