The Times Australia
Google AI
Business and Money

What happens when you give a low-income family $26,000 in their child’s first year? We think we’ve found out

  • Written by Sharon Goldfeld, Director, Center for Community Child Health Royal Children's Hospital; Professor, Department of Paediatrics, University of Melbourne; Theme Director Population Health, Murdoch Children's Research Institute

It’s well-known that children raised in families experiencing financial stress face greater risks[1] of psychological and educational difficulties and behavioural problems in later life.

What’s less clear is the extent to which transferring cash to their families very early in their lives can make the rest of their lives better.

The large Coronavirus Supplement[2] and JobKeeper[3] payments made during the first year of the COVID pandemic might turn out to help, but it’s too early to tell.

In a study just published in the journal Social Science & Medicine[4], we have attempted to find out without waiting.

What happens when you get $26,000?

For our Changing Children’s Chances[5] project, we wanted to find out what would happen to the social, emotional and physical health and educational progress of children from low-income Australian families if those families had been given A$26,000[6] ($1,000 a fortnight) in the first year of their child’s life.

Actually giving families $26,000 would have been expensive, so instead we used existing data from the Growing Up in Australia: Longitudinal Study of Australian Children[7] study that has tracked the progress of 5,107 infants since 2004.

This data included parent interviews and parent-reported questionnaires to determine their household income and family circumstances.

Better child health, better parent health

Using a technique known as target trial emulation[8], we were able to work out the potential benefits had we been able to really hand out large sums of money.

Examining families with an annual household income below $56,137 per year we found that a single hypothetical supplement of $26,000 in a child’s first year:

  • reduced children’s risk of poor social-emotional outcomes at age four to five; equal to a 12% improvement in equity

  • reduced children’s risk of poor learning outcomes at age four to five; equal to an 11% improvement in equity

  • reduced children’s risk of poor physical functioning outcomes at age four to five; equal to a 10% improvement in equity

  • reduced the risk of poor mental health of the child’s primary carer at two to three years; equal to a 7% improvement in equity.

The benefits were similar when we simulated giving the benefit to more households (those with incomes up to AU$99,864).

While the hypothetical income supplement of $26,000 was generous compared to the sums of cash previously studied[9], it would be incremental to current government income support.

Cash was good, but not enough

An important finding was that despite their size the cash transfers didn’t eliminate inequalities in outcomes. Inequities remained in children’s health, development and wellbeing.

This suggests income support is part of what is needed, but not the only thing. Research from low and middle-income countries finds that “stacked” cash-plus programs that include services such as healthcare are more effective[10] than cash alone.

The measures introduced during the first year of COVID have shown us it’s possible to give low-income families much more financial support. Our findings suggest it is worthwhile.

The Changing Children’s Chances Investigator Group[11] was responsible for the research that underpined this article.

References

  1. ^ greater risks (onlinelibrary.wiley.com)
  2. ^ Coronavirus Supplement (www.abc.net.au)
  3. ^ JobKeeper (treasury.gov.au)
  4. ^ Social Science & Medicine (www.sciencedirect.com)
  5. ^ Changing Children’s Chances (www.ccch.org.au)
  6. ^ A$26,000 (cdn.theconversation.com)
  7. ^ Growing Up in Australia: Longitudinal Study of Australian Children (growingupinaustralia.gov.au)
  8. ^ target trial emulation (pubmed.ncbi.nlm.nih.gov)
  9. ^ previously studied (www.pnas.org)
  10. ^ more effective (doi.org)
  11. ^ Changing Children’s Chances Investigator Group (www.rch.org.au)

Authors: Sharon Goldfeld, Director, Center for Community Child Health Royal Children's Hospital; Professor, Department of Paediatrics, University of Melbourne; Theme Director Population Health, Murdoch Children's Research Institute

Read more https://theconversation.com/what-happens-when-you-give-a-low-income-family-26-000-in-their-childs-first-year-we-think-weve-found-out-219104

Business Times

Technical SEO Fundamentals Every Small Business Website Must Fix …

Technical SEO Fundamentals often sound intimidating to small business owners. Many Melbourne businesses assume technical fi...

When It Comes To Business In Australia – Here’s How To Look Your …

When it comes to doing business here in Australia, you always need to look your best, and nobody remembers the person who did...

SMEs face growing payroll challenges one year in on wage theft re…

A year after wage theft reforms came into effect, Australian SMEs are confronting a new reality. Paying employees correctly...

The Times Features

Technical SEO Fundamentals Every Small Business Website Must Fix in 2026

Technical SEO Fundamentals often sound intimidating to small business owners. Many Melbourne busin...

Most Older Australians Want to Stay in Their Homes Despite Pressure to Downsize

Retirees need credible alternatives to downsizing that respect their preferences The national con...

The past year saw three quarters of struggling households in NSW & ACT experience food insecurity for the first time – yet the wealth of…

Everyday Australians are struggling to make ends meet, with the cost-of-living crisis the major ca...

The Week That Was in Federal Parliament Politics: Will We Have an Effective Opposition Soon?

Federal Parliament returned this week to a familiar rhythm: government ministers defending the p...

Why Pictures Help To Add Colour & Life To The Inside Of Your Australian Property

Many Australian homeowners complain that their home is still missing something, even though they hav...

What the RBA wants Australians to do next to fight inflation – or risk more rate hikes

When the Reserve Bank of Australia (RBA) board voted unanimously[1] to lift the cash rate to 3.8...

Do You Need a Building & Pest Inspection for New Homes in Melbourne?

Many buyers assume that a brand-new home does not need an inspection. After all, everything is new...

A Step-by-Step Guide to Planning Your Office Move in Perth

Planning an office relocation can be a complex task, especially when business operations need to con...

What’s behind the surge in the price of gold and silver?

Gold and silver don’t usually move like meme stocks. They grind. They trend. They react to inflati...