“The money, as far as the researchers can tell, has not made a difference.”
These words rang through my ears during a commute this summer. I was listening to The Daily, the flagship podcast of The New York Times. The episode covered a study on Baby’s First Years (BFY), a program that sent cash transfers to 1,000 new mothers in the U.S.[i] The hook: the cash had no impact on their children’s development outcomes, including language and function.
I felt unmoored. Was it all for nothing?
That The Daily, with over 13 million listeners, had dedicated an entire episode to one study felt remarkable for a news cycle show.[ii] But it also felt misleading — the study was one of a whole body of literature on cash, but it was barely considered in that context. The Daily was mirroring popular anxieties about cash but was legitimizing them with empirics. The result: many casual listeners walked away thinking “cash doesn’t work.”
But the evidence tells a different story – cash works in many contexts around the world. It is not a cure-all, but it is a universal band aid.
The global case for cash transfers
Before coming to HKS, I worked for GiveDirectly. an international non-profit that sends unconditional cash transfers to people in extreme poverty.[iii] I joined GiveDirectly because I had become jaded by the traditional aid sector, where donor interests take precedence over people’s needs.[iv] Simply ‘giving people money’ instead seemed operationally effective, empirically backed, and ethically sound.
Cash can effectively provide relief in any place with basic financial services and minimally functioning markets. The World Food Programme, the largest humanitarian organization operating in the harshest conditions, reported significant efficiency gains from sending cash instead of providing food aid.[v] A particularly stark UNICEF study in Somalia reported that 85% of the funds spent on cash transfers went to recipients, compared to only 35% when spent on food.[vi]
This operational ease is backed by empirical impact. These transfers generate a 2.5x multiplier in local economies.[vii] That is, each $1 in transfers yields $2.5 in economic activity. Reading recipient stories from GiveDirectly illustrates this clearly: “I know tailoring, but I didn’t have a sewing machine to work with,” reports Naomi, a 24-year-old in Kenya who used a $550 transfer to open a tailoring shop.[viii] She bought a new sewing machine and set it up in the market center, where she was thronged by customers who had also recently received transfers. “I am busy sewing clothes for my neighbors and other people from the village and nearby villages,” she said. The one-time transfer created a virtuous cycle of opportunities for her, supported by her clients’ ability to pay for these services.
A huge body of literature supports effects like these. A 2024 meta-analysis covering 115 randomized control trials in low- and middle-income countries showed that cash transfers have strongly positive impacts on consumption, income, and food security.[ix] Across contexts, they further impact education, health, and even cortisol-levels.[x]
Cash transfers don’t only matter for ‘poor countries.’ In fact, considering cash’s long-term effects brings us to the United States. Between 1911 and 1935, the Mother’s Pension program delivered cash transfers to poor single mothers, accounting for approximately 30% of their total income.[xi] One generation later, male children of recipients lived longer, received more education, and had higher incomes in adulthood.[xii]
Considering cash within its context
The results from the BFY study, then, should be evaluated in this broader context. The $333/month transfer is small, amounting to less than 25% of the U.S. federal poverty line. Research has demonstrated that ‘high-value’ transfers, which account for more than 30% of annual income for poor families, are more effective in spurring consumption and investment.[xiii] GiveDirectly’s lump-sum programs, for instance, provide the equivalent of six-months of income. Further, much of BFY’s evaluation occurred during Covid, when stimulus packages provided transfers to all participants, muddling the measurement of BFY’s effects. It’s not surprising that the impact appeared muted.
Then why did BFY become the economics study of the summer last year? In part because it was a large-scale, rigorous trial of a socially important demographic: new mothers and their young children. But instead of handling the results with care and rigor, much of the discourse has used the study as an empirically veiled outlet for our anxieties about the future, which can’t be resolved through statistics.
Across the political spectrum, cash transfers are used to articulate other anxieties about the future. Critics on the left worry that a move to cash would be a front for dismantling other social services. Conservative ones dismiss cash transfers as ‘free handouts’ that would make recipients lazy. And others are skeptical of Silicon Valley’s support of basic income programs in the wake of rapid technological change through AI.[xiv] Scholars within the cash movement have criticized these billionaires for using basic income as a ‘Trojan horse for AI’– a way to absolve responsibility for social consequences of technology.[xv]
The BFY study became a Rorschach test for these different anxieties. For the left, null results on child development prove that incremental dollars are better spent on social services. For conservatives, it confirmed that cash transfers only waste money. These critiques are not unfounded, but in popular discourse they disingenuously culminate into one take-away: cash doesn’t work.
From empirics to dignity
BFY is a rigorous and well-executed study, but its results should only be considered within the context of the broader literature on cash.
But even if we were to take BFY results on face-value, they don’t compromise the moral case for cash transfers.
Cash helps alleviate suffering today. They provide agency and dignity to people whose sole fault is being born into a low-income country or segregated neighborhood. In BFY, parents who received the transfer did spend $68/month more on toys and childcare.[xvi] The dignity of choice in these circumstances, which may be as simple as buying a new winter coat for your child, should not be underestimated.
An uncertain future is not a good enough reason to withhold aid from those who need it today. One study with null results, conducted under unusual conditions, should not override our accumulated knowledge on cash. Cash can’t solve systemic issues, but it can alleviate suffering today. That is not something we can afford to overlook.
[i] Kimberly Noble et al., “The Effect of a Monthly Unconditional Cash Transfer on Children’s Development at Four Years of Age: A Randomized Controlled Trial in the U.S.,” Working Paper no. 33844, Working Paper Series (National Bureau of Economic Research, May 2025), https://doi.org/10.3386/w33844.
[ii] “More Money Was Supposed to Help Poor Kids. So Why Didn’t It? – The New York Times,” The New York Times, August 6, 2026, https://www.nytimes.com/2025/08/06/podcasts/the-daily/cash-payments-poor-kids-study.html.
[iii] “GiveDirectly: Send Money to People Living in Poverty,” GiveDirectly, accessed January 7, 2026, https://www.givedirectly.org/.
[iv] William Easterly, The Cartel of Good Intentions: Markets vs. Bureaucracy in Foreign Aid – Working Paper 4, July 13, 2005, https://www.cgdev.org/publication/cartel-good-intentions-markets-vs-bureaucracy-foreign-aid-working-paper-4.
[v] “Cash and In-Kind Transfers in Humanitarian Settings: A Review of Evidence and Knowledge Gaps | World Food Programme,” March 28, 2022, https://www.wfp.org/publications/cash-and-kind-transfers-humanitarian-settings-review-evidence-and-knowledge-gaps.
[vi] “Summary Report: Final Evaluation of the Unconditional Cash and Voucher Response to the 2011–12 Crisis in Somalia – Somalia | ReliefWeb,” August 23, 2013, https://reliefweb.int/report/somalia/summary-report-final-evaluation-unconditional-cash-and-voucher-response-2011%E2%80%9312.
[vii] Dennis Egger et al., “General Equilibrium Effects of Cash Transfers: Experimental Evidence From Kenya,” Econometrica 90, no. 6 (2022): 2603–43, https://doi.org/10.3982/ECTA17945.
[viii] “Naomi,” (Kenya), GiveDirectly, October 2025, live.givedirectly.org, https://live.givedirectly.org/profile/019850ed-526a-7073-bebe-3a0e37c8318e?p=1.
[ix] Tommaso Crosta et al., “Unconditional Cash Transfers: A Bayesian Meta-Analysis of Randomized Evaluations in Low and Middle Income Countries,” Working Paper no. 32779, Working Paper Series (National Bureau of Economic Research, August 2024), https://doi.org/10.3386/w32779.
[x] Johannes Haushofer and Jeremy Shapiro, “The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya*,” The Quarterly Journal of Economics 131, no. 4 (2016): 1973–2042, https://doi.org/10.1093/qje/qjw025.
[xi] Anna Aizer et al., “The Long Term Impact of Cash Transfers to Poor Families,” Working Paper no. 20103, Working Paper Series (National Bureau of Economic Research, May 2014), 940–41, https://doi.org/10.3386/w20103.
[xii] Aizer et al., “The Long Term Impact of Cash Transfers to Poor Families.”
[xiii] World Bank Poverty Action, Innovations for, “Cash Transfer Size : How Much Is Enough?,” Text/HTML, World Bank, accessed February 9, 2026, https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099061324164533308.
[xiv] Jennifer Ludden, “As New Tech Threatens Jobs, Silicon Valley Promotes No-Strings Cash Aid,” National, NPR, July 22, 2024, https://www.npr.org/2024/07/19/nx-s1-5035263/basic-income-cash-aid-ai-sam-altman-silicon-valley-jobs.
[xv] David Streitfeld, “Is It Silicon Valley’s Job to Make Guaranteed Income a Reality?,” Technology, The New York Times, July 16, 2024, https://www.nytimes.com/2024/07/16/technology/ubi-openai-silicon-valley.html.
[xvi] BFY Monthly Cash Gift Increases Families’ Investments in Young Children (Duke Sanford, Center for Child & Family Policy, 2024), https://childandfamilypolicy.duke.edu/wp-content/uploads/2024/06/BFY-Monthly-Cash-Gift-Increases-Families-Investments-in-Young-Children.pdf.