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Exploring Policies that Address Poverty and its Impact on Child Development

New research from Harvard University suggests that policies that aim to reduce poverty may lead to larger brains in children, underscoring the need for a strong social safety net.

A group of children holding hands

New research from Harvard University suggests that policies that aim to reduce poverty may lead to larger brains in children, underscoring the need for a strong social safety net.

Researchers looked at brain images from 11,000 children in 17 different states that offer a range of health benefits and cash assistance to families who earn lower wages.

On average, the research found that children in states with generous benefits had a larger hippocampus, the section of the brain involved in learning, memory and emotion processing and also experienced fewer mental health and behavioral problems.

The research team found almost a 40% difference in brain size among children whose families earn lower wages living in states with the most generous benefits, such as California, versus the least generous, like Oklahoma.

CMF recently reported on research from Columbia University that suggests increased cash assistance provided to mothers can positively impact the health of their infants, with increased brain activity.  

That research revealed children’s brain measurements at age 1 showed faster activity in key brain regions in infants whose families received $300-plus monthly cash assistance for a year, compared with those who received $20 each month. 

This recent research further underscores the importance of a strong safety net and that providing families the ability to make decisions with direct cash has an impact. 

Tax credits such as the Earned Income Tax Credit (EITC) and the Child Care Tax Credit (CTC) can help alleviate financial burdens on families and their children. 

The EITC is a bipartisan, refundable tax break for working families offered at the federal and state level and the CTC helps provide support families’ most urgent needs. 

In Michigan the EITC is 6%, one of the lowest in the country. It was once 20% but was lowered in 2011. 

CMF is partnering with the Michigan League for Public Policy and others in supporting the increase of the state EITC to 30%. CMF recently signed on to an EITC support statement.

In March 2021, lawmakers increased the CTC benefit from $2,000 per child per year to a maximum of $3,600 per child five or younger and $3,000 for children 6-17. 

Families with children under the age of 18 were eligible for monthly cash payments that began in July 2021 through the expanded CTC. 

According to an article, by December 2021, the expanded CTC reached 61.2 million children across the country in more than 36 million households and kept 3.7 million children out of poverty.

Center for the Study of Social Policy (CSSP) conducted research, funded by the W.K. Kellogg Foundation, to learn about the impact of the CTC and child care investments on families and communities in Michigan. 

CSSP conducted 15 interviews with families of color in the state who earn lower wages to learn about their experiences accessing the CTC and child care services.

According to the research, nearly 90% of Michigan families felt that the monthly payments reduced their stress about money. 

The data revealed that Michigan families’ top five ways they reported using the CTC funds were on basic needs like food and groceries, rent or mortgage, childcare, phone, internet and utility bills, and shoes and clothing. 

Want more? 

Read more about the Earned Income Tax Credit and the Childcare Tax Credit. 

Learn more about how poverty affects children’s brains.

The Michigan League for Public Policy developed fact sheets outlining what restoring or expanding the EITC would mean statewide and at the county level.