Cash transfer programs are “powerful tools” for improving the health and nutrition of families

26 Jun 2023 --- The doubled US Child Tax Credit during the COVID-19 pandemic, reduced poverty by 40% in households with children, according to new research. As of December 21, 2021, the tax credit went back to its original amount. The authors found that adults were 3% more likely to report better health and 1.9% more likely to report food security through the additional cash payments.

The policy of providing increased payments was implemented to assist families during the COVID-19 pandemic and reverted to its initial design in January 2022.

The authors suggest that unconditional cash transfer programs should be considered as a potentially effective method to improve population health. 

“Evidence like this can help guide the public, the media and politicians as they advocate for and debate the policy’s future,” says the study’s lead author, Dr. Jordan Rook, a fellow in the National Clinician Scholars Program at UCLA, US. 

“Cash transfer programs like the 2021 Child Tax Credit expansion may be powerful tools in improving the health, well-being and nutrition of families.” 

The research team notes that one in six US families with children lives in poverty, which leads to poorer health and a shorter life expectancy. 

“Improved health for 1.08 million”
The researchers used data from 39,479 respondents to the National Health Interview Survey from 2019-2021. Before the monthly payments under the Child Tax Credit, 60% of eligible adults reported excellent or very good health. In comparison, 88% said having food security – access to sufficient food to meet average dietary needs. 

At the same time, 55% of ineligible adults said they had excellent or very good health, while 89% reported experiencing food security. 

The study’s authors suggest considering unconditional cash transfer programs to improve population health.By comparing health and food security changes between eligible and ineligible families, the researchers estimated the impact of the Child Tax Credit monthly payments. 

“Assuming the conservative estimate of one adult per household, this represents improved health for 1.08 million adults and newfound food security for 684,000 households,” notes Rook. 

“These changes potentially represent important gains in health and nutrition for hundreds of thousands of US families because of this pandemic-era policy.”

The study’s limitations include the possibility that job losses and expansions to other social programs, such as unemployment or Supplemental Nutrition Assistance Program (SNAP) during the pandemic, affected the findings.

Meanwhile, Indian researchers linked more persistent and severe household food insecurity to lower children’s educational outcomes in years at school, math and vocabulary test scores.

Child Tax Credit benefits
The policy’s monthly payments were expanded during the pandemic as part of the American Rescue Plan.

For families with eligible incomes, annual payments increased from up to US$2,000 per child of 16 or younger to US$3,600 per child ages five or younger and US$3,000 per child aged 6-17.

Families could receive half this amount in monthly checks, which amounted to US$250-300 per child. All low-income families with children could receive the entire credit, regardless of their work status or income.

The expansion has not been renewed due to legislator concerns that the credit was overly generous – especially to lower-income families with limited tax liability – and did not include work requirements.

At the same time, anti-hunger activists call for an end to work requirements in SNAP, which were recently expanded to people aged 50-54.

The researchers note that future investigations should focus on the implementation of cash transfer programs to ensure the equitable disbursement of future payments. Future studies should continue examining the policy’s association with health, barriers to receipt and cost-effectiveness.

Edited by Jolanda van Hal