• A recent study showed a connection between monthly cash gifts to low-income mothers and enhanced cognitive development in their infants.
  • Financial well-being can contribute to healthy development in children by alleviating parental stress and the cognitive effects of toxic stress.
  • Children who experience toxic stress are at increased risk for physical and mental health problems.
  • Targeted interventions can address the toxic stress response in children and families.

Politicians often talk about the harmful effects of poverty on children, but can they draw a direct line between cold hard cash and an infant’s cognitive development? A recent study in PNAS (Proceedings of the National Academy of Sciences) showed that giving low-income moms $333 every month with no strings attached resulted in measurable improvements in their children’s brain activity by their first birthdays. In comparison, the babies of mothers who were unconditionally gifted a lesser amount–$20/month–demonstrated lesser brain power. 

First of all, this is wild. These researchers made a concrete connection between dollar amounts and electrical brain activity as measured by electroencephalography (EEG). Second, the study calls for some deeper analysis into why money makes such a significant impact on cognitive development. And third, this is exciting, because social scientists can now use this knowledge to devise better mental health interventions for impoverished kids. So let’s take a closer look at the PNAS study and what it might mean for early childhood outcomes.

Why Would Cash Improve Children’s Mental Health Outcomes?

Experts have known for a long time that personal finances as well as macroeconomics have an impact on children’s mental health. Other studies have shown that reductions in family income increase the risk of children developing mental health problems, and that children’s mental health tends to deteriorate as the economy deteriorates. Even if a kid has a roof over their head and is getting enough food, financial stressors can produce a constellation of problems at home:  

  • Parental dysphoria (bad mood) and irritability
  • Conflict between parents
  • Increased parental hostility toward children
  • More coercive exchanges between parents and children

These problems can contribute to emotional and behavioral issues in children and adolescents.

Now imagine the child is very young and their brain is still developing. If their parents are struggling to make ends meet, Mom or Dad might feel depressed, anxious, out of control, uncertain about the future, etc. This can all lead to unintentional neglect during a critical time period for cognitive development. Kids might have fewer opportunities for positive stimulation, like a rich and varied language environment, and more opportunities for negative stimulation, like unmonitored TV and household chaos. In fact, research shows that young children who are exposed to parental stress during infancy report more mental health problems at age three.

What Is Toxic Stress in Early Childhood?

Harvard University’s Center on the Developing Child defines three types of stress that kids can experience: 

  • Positive stress. When a human is stimulated or scared, they briefly experience elevated heart rates and small increases in stress hormones. These normal fluctuations are considered positive stress.
  • Tolerable stress. Tolerable stress is when the body is far more alert for far longer, as when a child loses someone close to them or they’re in an accident. But eventually the child learns to adapt and recover through the mediation of caring adults.
  • Toxic stress. Toxic stress happens when a child’s body is generally locked, long-term, in a state of high arousal because they don’t have the adult support they need to regain their equilibrium. There’s no buffer for the harm.

Toxic stress can be caused by a number of environmental factors like physical and/or emotional abuse, chronic neglect, and other kinds of adverse childhood experiences (ACEs). When a growing child is continually flooded with stress hormones and responses, the brain and body suffer long-term consequences

Toxic stress not only tends to prevent a child from learning to adapt and cope in healthy ways to life’s ups and downs, it can also permanently “disrupt the architecture of the developing brain.” This means that parental stress can contribute to children’s behavioral problems, learning problems, and physical health problems that may last a lifetime. It’s not just EEG brain activity that can show a decline from toxic stress–it’s basically everything good in a child’s life. 

Preventing Toxic Stress in Families

Researchers don’t know if the extra $333 in the PNAS study helped improve kids’ cognitive skills because moms could suddenly afford better food and healthcare, or because they could work less and spend more quality time with their infants, or simply because they weren’t as stressed. Experts still have to dig in further to how exactly cash aid to poor mothers produced such noticeable cognitive effects in kids. And of course money doesn’t solve everything. Though poor children tend to show differences in brain structure and function–they may literally have less gray matter–being born wealthy doesn’t automatically ensure your well-being. Rich and poor parental support can occur at every income bracket.

The inspiring takeaway here for parents is that though money is a tangible that we can’t always materialize on our own, stress and trauma are intangible, internal realities that we can work to modify.  And there’s nothing more powerful than professional therapy for addressing those innermost states. 

But therapy costs money, and so now we’re back where we started: People need money to break harmful cycles of intergenerational stress. Innovative programs exist, however, that address both financial resources and emotional resources in helping families through adversity. These seem to be the kind of practical, on-the-ground and in-the-heart interventions needed to lift children out of poverty. People need money, for sure, but they also need to feel what the money represents: care.