Society / August 30, 2023

What Happens When You Give New Parents Cash Aid?

Cash transfer programs are forging a path for guaranteed income.

Lizzie Tribone
(Shutterstock)

A wave of new cash transfer programs that target pregnant and postpartum people is emerging across the United States, offering a lifeline to low-income families and reviving the discussion on the afterlife of pandemic-era expanded earned income and child tax credits.

Six weeks after giving birth, Priscilla Rivera began receiving cash transfers from the Bridge Project, a New York City–based program launched in 2021 by the Monarch Foundation. The program provides up to $1,000 a month to pregnant people across New York City and Rochester for 36 months. The Washington Heights first-time mom stretches the money across different expenses: rent, food, activities for her son, as well as other baby essentials. “It’s more helpful to use it all around, instead of just one specific thing,” she told The Nation.

“It just lifts a weight off of your shoulders,” Priscilla said of the cash transfers she has been receiving for about a year. “It was a blessing for me.”

When she found out she was pregnant, Priscilla stepped back from her job as a nanny because of the physical nature of her work. The cash she then received through the Bridge Project allowed her to spend a year with her son before returning to work part-time.

While unconditional cash assistance is a common anti-poverty intervention in low- and middle-income countries, such as in Indonesia and Zambia, the United States has largely shied away from this form of support, instead favoring in-kind and conditional assistance. The expanded Child Tax Credit in 2021 was the closest the nation had come to sending a monthly stipend to millions of families with children, but Congress members let the Covid-era program expire after less than a year. For years, economists and policy makers have raised concerns about how cash assistance programs would lead to reduced labor force participation, and be used for “temptation goods” such as alcohol and cigarettes. But in fact, the Bridge Project has found that participants have been able to plan more effectively for emergencies, access child care at higher rates, and attain individual and household stability.

Unconditional cash assistance programs that target pregnant and postpartum people are redefining the narrative around no-strings-attached cash. With an understanding of income as a determinant of health, these programs hold in common the belief that cash can disrupt intergenerational poverty at a specific juncture that exacerbates inequality: childbirth.

Megha Agarwal, cofounder and executive director of the Bridge Project, told The Nation that the amount the Bridge Project gives new parents tips the balance, offering new mothers breathing room as they navigate their new financial reality of caring for a new family member.

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The program is designed to give parents full discretion over how their cash is spent, and therefore presents an alternative form of support that bypasses the matrix of rules that can define government programs.

Take, for example, New York’s Special Supplemental Nutrition Program for Women, Infants, and Children, a program that provides food to pregnant people and new parents. Those with a food card cannot buy 2 percent reduced-fat milk, peanut butter containing palm oil, organic eggs—the list of restrictions goes on. “We’ve created complexity where there doesn’t need to be,” Agarwal said.

The timing of cash receipt is important, Dr. Margaret McConnell, associate professor of global health economics at the Harvard T.H. Chan School of Public Health, told The Nation. Yet “conditions often introduce a delay: You have to do something, then receive the money,” she said.

Aside from doing away with the burden and delay of bureaucracy, the no-questions-asked nature of cash transfers also offers “flexibility in a way that really center[s] individual autonomy and trust,” said Agarwal.

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The Bridge Project builds on the success of other programs in the United States, including the Mississippi-based Magnolia Mother’s Trust. Springboard to Opportunities, an organization that connects people with affordable housing in Jackson. Mississippi established the trust in 2018, which provides $1,000 a month for a year to Black mothers who are in extreme poverty and live in affordable housing. It is the longest-running guaranteed income pilot program in the United States, and the only one to focus on Black mothers.

Over the course of the program, a higher percentage of mothers were able to save money, and participants also reported decreased financial stress. The latter is an important consideration in Mississippi. The state has the highest rate in the country of female-headed households, which are more likely to be in poverty than dual-headed households. Financial stress is linked to mental health and well-being, as well as morbidity: A 2019 study found that Black people who faced “moderate to high” financial stress were more likely to develop heart disease than those who did not.

Qualitative evidence demonstrates how the program has positively affected maternal health outcomes, too. “We’ve had moms tell us they were able to take maternity leave, go on bed rest, and prioritize their health during pregnancy because of the support provided through the Magnolia Mother’s Trust,” Aisha Nyandoro, CEO of Springboard to Opportunities, told The Nation.

Elsewhere, the San Francisco–based Abundant Birth Project, a pilot program, seeks to reduce reproductive health inequalities among Black and Pacific Islander communities in the region. These communities have a median household income roughly a third that of the general population in the city, and have the first- and second-highest preterm birth rates. As birth workers have long argued, systemic changes are needed to counter both the insufficient perinatal workforce and the lack of quality, patient-centered care, which contributes to a growing maternal health care crisis. By softening the edges of financial insecurity through cash transfers, the pilot program is playing an important role in fighting against these inequities.

These programs are operating as parents struggle amid a cost-of-living crisis to purchase essential products for their newborns. Nearly half (47 percent) of families reported being in “diaper need” in 2023, with roughly the same number of families (46 percent) resorting to cutting back on other essential services—such as food and utilities—in order to afford diapers, research by the National Diaper Bank Network found. At the same time, child care has surpassed the cost of housing for families across the Midwest, the Northeast, and the South. In New York, for instance, the average cost of care for two children is just over $40,286 annually, while average housing costs are about $27,204 annually.

Many of those behind these cash transfer programs have their eyes set on the federal government. They hope their programs, which model individual autonomy and consistent assistance, become public policy. As Nyandoro explained, “all of the programs are telling the same story: Cash without restrictions works.”

Priscilla has started to take her now-1-year-old son to swimming lessons on the East Side of Manhattan, which she’s been able to afford through the cash transfers. It’s about an hour’s journey from her home in Washington Heights, but she’s happy to make it. Her son’s access to the water has become a meaningful ritual, in itself an expression of living outside the churn of basic needs. As long as she has the cash, she’ll continue to head downtown.

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Lizzie Tribone

Lizzie Tribone is a freelance writer based in Brooklyn. She has been published in In These Times, The American Prospect, and The Baffler, among others.

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