Unconditional Cash and Family Investments in Infants: Evidence from a Large-Scale Cash Transfer Experiment in the U.S.

Economists have limited causal evidence on how families receiving unconditional income would spend those funds. We examine financial and time investments in infants among families living in poverty from a large-scale, multi-site randomized controlled study of monthly unconditional cash. We find increased spending on child-specific goods and mothers' early-learning activities with their infants. The marginal propensity to consume child-focused items from the cash transfer exceeded that from other income, consistent with the behavioral cues in the design. We find no statistically detectable offsets in household earnings or impacts on pre-registered outcomes related to expenditures, labor supply, childcare or subjective well-being.