Cash for poor mothers?

Should higher children’s allowance be paid to vulnerable children & families? Should it be paid directly to mothers? FRANS CAMILLERI WRITES.

Recently I came across a reproduction of a painting entitled “The Drunkard” by Eugène Laermans, a Belgian painter whose socially aware work was devoted to the lives of the unfortunate rural and urban poor and was often tragic in character. In this painting, the drunkard has to leave his home on a cold winter’s day, cast out because he couldn’t pay the rent. His wife and children trundle behind him.

The painting illustrates in a dramatic way a story of degeneration, as the drunkard and his family helplessly head downwards. Most people would say it’s his fault, and that he should have had a proper job and taken care of his family. Some would say that he deserves no help. By implication, his wife and children are just collateral damage of his vice.

I mention this painting because it reminds me of the role played by fathers and mothers in investing in their children’s education, health, and overall welfare. It is a crucial role, all the more so when one considers that countless studies worldwide show that the educational and income levels of parents tend to be transmitted to children.

It also raises in mind the question whether anybody wanting to help unfortunate or vulnerable people ─ be they the community or the State ─ should direct the assistance to the formal head of the family or to the mother. An old Belgian law which introduced child benefits decades ago stipulates that these benefits are paid to the mother. The law still holds today, even if it allows for exceptions when the mother is not present in the household.

An old Belgian law which introduced child benefits decades ago stipulates that these benefits are paid to the mother.

In policy circles, both in low and high-income countries, it is often assumed that giving transfers to mothers rather than fathers will lead to better outcomes. This assumption is based on more than 19th century paintings or anecdotal evidence. Several research papers investigating bargaining inside the household suggest that resources under the mother’s control have a stronger positive impact on a child’s health and schooling than when those resources are controlled by the father.

Presumably because of the influence of this line of research, most current cash transfer programmes around the world give the resources to the mother. Here in Malta, children’s allowances are paid to the person who makes the application, which could be either of the eligible couple having children. I am told that many applicants are women, though I am not sure what the percentage is.

I have been intrigued by a randomised control trial conducted by Damien de Walke, a World Bank economist, together with Richard Akresh and Harounan Kazianga. In a two-year pilot programme, randomly distributed cash transfers that were either conditional or unconditional and were given to either mothers or fathers. Conditionality was linked to older children enrolling in school and attending regularly and younger children receiving preventive health check-ups.

They found that the cash transfers generally improved education, health and household wealth outcomes. However, the gender of the transfer’s recipient as well as the conditionality led to differentiated impacts. For school enrolment and most child health outcomes, conditional cash transfers outperform unconditional cash transfers.

Their results on the transfer recipient’s gender suggest that the assumption that it is always better to give transfers to the mother should be questioned or at least nuanced. While giving cash to mothers seems slightly, but not significantly, better for education outcomes, giving cash to fathers leads to significantly better nutritional outcomes. Transfers given to fathers also lead to relatively more investment in the house’s equipment.

Meanwhile, I have been struck by a new study published in late January in the Proceedings of the National Academies of Sciences journal. The findings of the study underscore the role that financial aid can play in children’s early development and could potentially have social policy implications.

Previous research had suggested a strong correlation between early childhood poverty and lower academic achievement compared to children who aren’t living in poverty. What’s more, the surface area of crucial parts in the brain that support language and executive functioning is smaller among children who are impoverished, according to peer-reviewed research published in the Journal of Neuroscience.

In the new study, entitled Baby’s First Years, 1,000 mothers with newborn infants were recruited and divided into two groups: one who would receive cash payments of $333 a month and another who would receive $20 a month. Researchers evaluated the children after one year and found that babies in the high cash group displayed more of the fast brain activity typically associated with cognitive development.

Martha J. Farah, a neuroscientist at the University of Pennsylvania who helped conduct the study, said that “it’s proof that just giving the families more money, even a modest amount of more money, leads to better brain development.” Kimberly Noble, who teaches neuroscience and education at Columbia University’s Teachers College, added that “in some ways, this underscores how sensitive children are to their environments very early in childhood.”

The concept is simple and seductive: Give people cash, lift them out of poverty. It’s a strategy increasingly being used in both lower- and higher-income countries to help poor people. International organizations such as the World Bank, USAID and the United Nations are funding more projects that focus on giving people cash. The U.S. is also experimenting more with cash payments. President Biden’s US$1.9 trillion relief package, for example, will give recurring payments to most families with children.

In short, there seem to be a growing consensus that cash is the best tool in the fight against poverty. But is it?

There is ample evidence that cash transfers have positive impacts on people living in poverty, at least on average. For example, a recent review of 165 studies found that cash assistance tends to increase spending on food and other goods, while also improving education and health outcomes. The authors further found little to no evidence of unintended consequences, such as people working less because they had higher non-labour incomes.

But this doesn’t mean that cash is the best strategy for fighting poverty. For one thing, it is often difficult to identify people who are actually poor and need the money so that cash assistance can be given to the right people. Another problem relates directly to the definition of poverty, which is both a lack of well-being and a lack of income.

Moreover, even if the poor can be successfully identified, some people may not receive the typical or average benefit because of problems converting cash into improvements in their well-being. For example, people may be experiencing mental or physical health issues, or they may be affected by the subtle ways that poverty itself compromises economic decision-making.

Cash can certainly help some people, but there is simply no one-size-fits-all approach to poverty alleviation. More generally, the idea of a cash consensus misses the point: Promoting human development means empowering people to make decisions for themselves, and this includes allowing them to choose the type of assistance that is appropriate for their situation.

In Malta, 20.4% of children under 18 are at risk of poverty, compared to an overall rate of 16.9%, and they are far more likely to live in poverty if they are being raised by a single mother. Women themselves are at greater risk of poverty than men by 2.7 p.p. Moreover, households with children are more likely to be at risk of poverty than ones without. For example, risk of poverty among households consisting of two adults with no children is 26.2%, whereas that among households with two adults and three or more children is 35.8%.

This certainly points to the need to direct more assistance to women, children, and families with children. The PL Manifesto proposals include several proposals in this respect. They include implementation of the EU’s proposed Guarantee for Children, support to parents whose children pursue their education beyond school leaving age, and an unprecedented rise in children’s allowances for all.

If there’s something that I don’t go along with, it is precisely the granting of children’s allowances to all. Rather, I would have preferred to see a higher allowance paid to vulnerable children and families and a lower one to other well-to-do families. It’s social justice.

Be it as it may, the proposals are welcome. One thing a future Labour Government may want to consider is what this article talks about, that is giving the additional grants to mothers, rather than to fathers.

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