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What does the prior literature tell us about the potential impact of cash transfers for families with young children in the UK?

A large body of evidence suggests that growing up in poverty is harmful to child development and that increases in family income improve children's early school achievement.

In parallel, there is strong evidence that infancy and early childhood, especially the first 1,000 days of life, are key developmental periods, in which growth and development are most rapid and sensitive to change.

Bringing together these two bodies of research, Nesta believes that cash payments to families beginning early in life may be an important tool to improve developmental outcomes for children in disadvantaged families - helping us progress our 10-year mission to narrow the early attainment gap in the UK.

As an early step in testing the potential role of cash payments in narrowing the early education outcome gap in the UK, we set out to answer the question: what do we know from cash transfer trials about the impact of cash payments to families on early childhood development? To do this, we conducted a review of experimental evidence from high-income countries, focusing on studies that provide increases in income to parents of children who are under 5 years old.

We sought to identify one of two things, depending on the depth of the evidence base we found: either an estimate of the likely impact of cash payments in the UK, which would help us to inform further work, or an understanding of what evidence already exists and where the gaps are, which would be a starting point for further research, including a potential cash transfer trial.


  • There is limited experimental evidence of the impact of cash transfers on child development in high-income countries. Among eight trials reviewed, three were ongoing and four lacked published results. No experimental studies were found from the UK, and few from other high-income countries offer insights into the potential impact of substantial cash transfers to UK families.
  • Across studies with published findings, the developmental outcomes reported for children whose families received cash payments before age five are often marginally better than those in the control group. However, these differences do not reach statistical significance.
  • In addition, reporting across studies does not allow us to estimate the likely impact of cash payments in the UK on developmental or educational outcomes.
  • The three ongoing, US-based studies provide the best opportunity for estimates of the effect of cash payments on child development. However, findings may not directly translate to the UK, given differences in context.

Next steps

We at Nesta have already begun to build on the findings of this review by reviewing non-experimental, UK-based evidence for cash transfers to low-income families. We have summarised the results of this and discussed our current thinking in our report 'The impact of cash transfers: Investigating how money affects children’s development in the UK and other high-income countries'.

We will continue to pursue further work to better understand and design effective interventions to tackle the link between family income and child outcomes, including analysing available non-experimental data and tracking the identified highly relevant, ongoing studies.

As we delve deeper, we are keen to engage with different individuals or organisations also investigating and addressing the impact of income on families’ lives. We invite any researchers, policymakers, service providers, campaigning organisations, consumer and parent advocates, or others working in this space, both in the UK and globally to reach out to us at [email protected].


Patricia J Lucas

Patricia J Lucas

Patricia J Lucas

Principal Researcher, fairer start mission

Patricia joined the fairer start mission as a principal researcher, leading on experimentation and evidence.

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Simran Motiani

Simran Motiani

Simran Motiani

Analyst, fairer start mission

Simran joins Nesta as an analyst for the fairer start mission.

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