Monday, October 12, 2015

How Small Annual Payments Made a Huge Difference for Kids' Development

Greater economic stability helps families, and children, thrive / Photo: Mike Keran, CC BY 2.0

study newly released by the National Bureau for Economic Research has HUGE implications for US social policy.  And it's all thanks to an accidental natural experiment. 

Four years into a ten-year study of 1,430 rural kids' mental health in North Carolina, the Eastern Band of Cherokees built a casino.  A quarter of the children being studied were affiliated with the tribe, which decided to distribute at least some casino profits as annual per capita payments.  The tribe paid out about $4,000 per person per year, or $16,000/yr for a family with four enrolled tribal members.  The per capitas boosted the families' incomes by just under 20% on average.

The impact on these children's mental health and their development of pro-social personality traits was substantial.  The stabilizing effect of the payments helped reduce family discord, promoted marital cohesion, and resulted in reduced alcohol abuse rates among parents receiving the boost in income, all of which made positive, lasting impacts on the kids.  And the children who'd been struggling the most benefited the most.

The following excerpt is a taste of a story about the study in Washington Post (also available at The Independent- click either link for the rest of it.


Not only did the extra income appear to lower the instance of behavioral and emotional disorders among the children, but, perhaps even more important, it also boosted two key personality traits that tend to go hand in hand with long-term positive life outcomes.

The first is conscientiousness. People who lack it tend to lie, break rules and have trouble paying attention. The second is agreeableness, which leads to a comfort around people and aptness for teamwork. And both are strongly correlated with various forms of later life success and happiness.

... Emilia Simeonova, a professor at Johns Hopkins University who studies the economics of health, and one of the paper's co-authors [said,] "There are very powerful correlations between conscientiousness and agreeableness and the ability to hold a job, to maintain a steady relationship. The two allow for people to succeed socially and professionally."

Remarkably, the change was the most pronounced in the children who were the most deficient. "This actually reduces inequality with respect to personality traits," said Akee. "On average, everyone is benefiting, but in particular it's helping the people who need it the most."

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