Another Study Shows That Cash Helps the Poor

Indian casinos: often a nasty business with some possible good outcomes.

Maybe these studies have been out there, and people are finding them now because income inequality and the effects of poverty on lifetime achievement are important concepts to understand for today's debates. Now surfaces in the New York Times a study of impoverished Cherokee youths and the impact cash stipends from casino profits had on outcomes:

The poorest children tended to have the greatest risk of psychiatric disorders, including emotional and behavioral problems. But just four years after the supplements began, Professor Costello observed marked improvements among those who moved out of poverty. The frequency of behavioral problems declined by 40 percent, nearly reaching the risk of children who had never been poor. Already well-off Cherokee children, on the other hand, showed no improvement. The supplements seemed to benefit the poorest children most dramatically.

When Professor Costello published her first study, in 2003, the field of mental health remained on the fence over whether poverty caused psychiatric problems, or psychiatric problems led to poverty. So she was surprised by the results. Even she hadn’t expected the cash to make much difference. “The expectation is that social interventions have relatively small effects,” she told me. “This one had quite large effects.”

She and her colleagues kept following the children. Minor crimes committed by Cherokee youth declined. On-time high school graduation rates improved. And by 2006, when the supplements had grown to about $9,000 yearly per member, Professor Costello could make another observation: The earlier the supplements arrived in a child’s life, the better that child’s mental health in early adulthood.

She’d started her study with three cohorts, ages 9, 11 and 13. When she caught up with them as 19- and 21-year-olds living on their own, she found that those who were youngest when the supplements began had benefited most. They were roughly one-third less likely to develop substance abuse and psychiatric problems in adulthood, compared with the oldest group of Cherokee children and with neighboring rural whites of the same age.

Cherokee children in the older cohorts, who were already 14 or 16 when the supplements began, on the other hand, didn’t show any improvements relative to rural whites. The extra cash evidently came too late to alter these older teenagers’ already-established trajectories.

The more we hear of studies like this, the more urgent it is that we begin to lobby and lobby hard for programs that transfer cash to the poor. Means? Higher minimum wages is one, even a raise to a living wage, somewhere in the range of $12 to $15. Minimum guaranteed income is another. Medicare or Medicaid for all is yet another part of it. But let's do it, friends.

A hardscrabble life on the reservations.