Key Findings: Parenting and Child Outcomes

What Happens When Families Get More Money

In America, a child's zip code and family income predict their future with troubling accuracy. Children from low-income households enter kindergarten already trailing their wealthier peers, and most never catch up. They are more likely to struggle with depression, anxiety, and attention problems. They earn less as adults, complete fewer years of education, and face greater challenges throughout their lives.¹

These stark realities have persisted despite decades of well-intentioned policies aimed at leveling the playing field. The "income achievement gap" has actually widened over the past 50 years, leading many researchers and policymakers to consider a more direct approach: putting money directly into families' hands through unconditional cash transfers.

The logic seems straightforward—if lack of money is the problem, then providing money should be the solution. But skeptics argue that family income is merely a symptom of deeper issues like education levels or parenting skills, and that cash alone won't create lasting change. The question that has emerged is deceptively simple yet profoundly complex: Does giving families more money actually help kids?

Recent research offers encouraging signs. Studies examining policy changes that increased family income have found improvements in children's test scores, mental health, and school success. Some even suggest that parents' relationships with their children improve when economic pressure eases.² But these studies left a crucial gap: while we can see that more money is linked to better outcomes for kids, we still don’t fully understand exactly how the cash produces those benefits.

The Black Box of Family Life

Researchers typically point to two pathways through which income might affect children. The first is the investment pathway—money allows parents to buy things that support development, such as books, nutritious food, stable housing, and enriching activities. The second is the family stress pathway—when families have more financial breathing room, parents experience less stress and can provide more patient, responsive caregiving.³

Both explanations make intuitive sense, but they assume parents will use additional money in predictable, measurable ways. In reality, the connection between income and parenting is far more nuanced. To design better policies, we need a clearer understanding of what parents actually do when given more financial resources and how those choices shape children’s lives.

To explore what changes when parents receive additional money, we draw on the OpenResearch unconditional cash transfer study—one of the most comprehensive efforts to date to trace the effects of cash on recipients’ daily lives. This mixed-methods randomized controlled trial enrolled 3,000 participants across two U.S. states. 1,000 were randomly assigned to receive $1,000 per month for 3 years, while a group of 2,000 control participants received $50 per month. At enrollment, 1,729 participants had a child or a child living in their household, and an additional 247 participants had a child at some point during the three-year transfer period. Using detailed surveys, administrative data, and six waves of in-depth interviews with a subset of 117 parents, the study captured everything from household spending and parenting practices to school outcomes and children’s well-being.

More Than Just the Basics: Effects on Spending

While the transfer was unconditional and not specifically designated for children, recipient parents spent significantly more money on their kids. Yet not all of that spending looked like traditional “investments” such as tutoring, books, or sports leagues. Instead, families—especially the lowest income households—used the money to meet basic needs, create meaningful family experiences, and invest in their own well-being to better support their children.

Child-related spending increased by an average of $32 per month overall, with an even larger effect of $43 among the lowest-income households (recipients whose total household income was below the federal poverty level (FPL) at enrollment). The largest and most statistically significant increases were on kids’ clothing and shoes, and the lowest-income families spent significantly more on essentials like diapers, personal care items, and over-the-counter medicine. Though not reflected in the spending data, parents with the lowest incomes were about 19% more likely to use childcare and averaged 2.75 additional hours of care per week—a 29% increase relative to parents who did not receive the transfer. When these parents changed childcare arrangements they were also 49% more likely to move to higher quality providers.⁴

The increases were not concentrated in traditional investments like educational materials or extracurricular activities. Parents used the money to meet basic needs, with the largest increases in housing and food expenses. Recipients were more likely to pay for housing and move to different housing units and neighborhoods.⁵ But our interviews revealed something more complex: parents often viewed purchases typically labeled as "consumption" as deliberate investments in their relationships with their children.

(Please click on the arrows to view additional graphs)

(Please click on the arrows to view additional graphs)

Take dining out, which increased substantially among recipient families. Rather than frivolous spending, parents framed these dollars as relational investments—pizza nights that sparked conversations, gas money for a day trip to an amusement park their child would remember. Grace, a single mother of three teenagers, planned monthly one-on-one outings with each child and talked about using that time to strengthen connection and communication: “We talk about what they want to do for the future, all that kind of stuff. Make sure they know that they can come to me no matter what.” Unlike extracurricular activities that require reliable transportation, ongoing costs, and predictable schedules, these shared experiences were more viable and sustainable for families experiencing economic uncertainty.

Another pattern that emerged from interviews was how parents viewed investments in their own well-being and work flexibility as indirect investments in their children—by making them better parents.

The transfer enabled some parents to reduce work hours or take more flexible jobs. This was particularly pronounced among single parents, who worked an average of 2.6 fewer hours per week compared to single parents who didn't receive the transfer. Many also reduced second jobs; recipient parents were on average 15% less likely to work two jobs, and single parents were 18% less likely.

However, the work flexibility didn't always translate into a change in the quantity of time with children; sometimes it was about the quality of that time. Rochelle, a single mother of three, turned down a promotion that would have meant higher pay but also higher stress, choosing instead to remain in a lower-pressure job where she could be emotionally present for her children.

Parents also used the transfer to invest in their own mental and physical health—therapy sessions, medical care, and in some cases, the financial independence needed to leave abusive relationships. These investments in parental well-being, while not directly child-focused, were consistently framed by parents as ways to become better caregivers.

Recipient parents spent an average of $22 more per month on healthcare for household members, and findings suggest modest increases in some types of healthcare utilization, though effects vary by service and most are not statistically significant. Parents also reported changes in health behaviors compared to parents who did not receive the transfer: daily tobacco use dropped by 11%, and those who did smoke reduced their daily cigarette consumption by 13%.⁵ While these changes did not translate into measurable improvements in parents’ overall physical health during the program period, they reflect a broader pattern of parents using financial support to improve the context in which they parent.

Effects on Parenting

Money didn’t just change parents’ budgets—it changed their state of mind. For some recipients, the biggest shift wasn’t what they could afford but how much mental space they gained. With less financial pressure, they felt better able to handle the ups and downs of parenting. One mother, Kenzie, explained it this way: "Because when you’re in a constant state of stress, you doom scroll on your phone or engage in unhealthy habits, and then you’re more short tempered or you’re just less present and you’re maybe lazier about things like conflict resolution and homework and getting up on time."

And she wasn’t alone. In the first year of the program, stress levels dropped significantly, easing the survival-mode mindset that many families had been living in. Overall, parents were 20% less likely to report high stress and saw a 5% reduction in their average stress score compared to control participants. The relief was even more pronounced among the lowest income parents: they were 31% less likely to experience high stress, with a 6% drop in stress scores. Though single parents were 21% less likely to report high stress, their overall stress scores did not change significantly.

Virginia, a mother of four, described the transformative effect of this relief: "When the stress level goes down, the mental capacity opens up. You have more room. You just literally have more mental space to think and just having more space to think actually lowers your stress, too... Being comfortable, feeling safe, not worrying about little freaking crap freed up my mind to be more present for them."

(Please click on the arrows to view additional graphs)

(Please click on the arrows to view additional graphs)

However, families’ experiences of stress became more complex over time. While the measurable impact of the transfer on stress scores faded by the second year, many parents noted that it was a different kind of stress—less about basic survival and more about their children, work, or other aspects of their lives. As one mother remarked, "It's one less stress...financial stress isn't necessary. It's more social, emotional stress now, I think that I have to worry about."

By the final year of the program, stress levels had actually increased among transfer recipients, with single parents experiencing particularly pronounced escalation. Some of this increase may be tied to anticipation of the program’s end, as financial stress surged in the final months when families faced the prospect of losing the income provided by the transfer. This pattern suggests that while the cash transfer addressed immediate financial pressures, the temporary nature of the support meant that some of the stress relief was inherently fragile, and other stressors emerged or became more salient as families' circumstances evolved.

These changes in family dynamics translated into measurable improvements in parenting. Overall, parents who received the transfer showed increased monitoring and supervision of their children, along with a slight reduction in corporal punishment. These improvements were much larger among the lowest-income parents and single parents, with notable reductions in inconsistent discipline among the lowest-income group. What is particularly striking is that these parenting improvements continued to grow over time, with the largest effects observed at the end of the transfer program—well after the initial reduction in stress had faded. This pattern suggests that better parenting wasn’t just about feeling less stressed in the moment, but about fundamental shifts in parental capacity that took time to fully develop.

The interviews helped clarify how these improvements manifested in daily life. Parents reported feeling less cognitive burden, showing more patience, and being more emotionally available. As one mother noted, using some of the money for therapy and self-care helped her “not explode so easily” while caring for her kids.

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Child Outcomes

Despite parents investing more in their children and showing measurable improvements in parenting practices, the effects on child outcomes were more complex. Parents who received the transfer were more likely to report difficulties in their children, particularly around hyperactivity and stress. The effects were strongest for children ages 5 to 10, with parents noting increased peer problems and hyperactivity compared to children in families who did not receive the transfer. Parents also reported that their children seemed more overwhelmed, stressed, and unable to manage things. Interestingly, these effects were concentrated among female children; parents reported no significant changes in behavior or stress for male children.

Qualitative interviews suggest a compelling interpretation: parents reported more difficulties not because children’s behavior was getting worse, but because parents were getting better at noticing. With increased monitoring and supervision, reduced work hours, and more emotional bandwidth, parents were more present and attuned to their children’s daily experiences. They may have been more likely to observe behaviors they might have otherwise missed. The gender differences might reflect different parental expectations and attention patterns for daughters versus sons.

When we examined educational outcomes through state administrative records—attendance, test scores, grade repetition, participation in gifted programs, and disciplinary actions—we found minimal effects. Test scores remained largely unchanged, and there were no significant improvements in school attendance or academic performance.

The COVID-19 pandemic does complicate this picture considerably. The first part of the unconditional cash study coincided with unprecedented disruptions to schooling, with students cycling between virtual, hybrid, and in-person learning. Some students whose parents received the transfer attended schools with more hybrid instruction, though like other educational outcomes this finding wasn’t statistically robust after controlling for multiple comparisons. School performance dropped precipitously across all populations during this period and there was variation in reporting, making it difficult to isolate the effects of the cash transfer from the broader educational chaos.

For older students who were at least 16 during the transfer period, we found no significant effects on college enrollment or degree completion. However, these outcomes are difficult to assess in the short term, especially since many participants were just reaching college age as the study concluded.