Date: Jan 21, 2014 5:51 PM
Author: Jerry P. Becker
Subject: What Happens When the Poor Receive a Stipend?

From The New York Times, Saturday, January 18, 2014. See
. Our thanks to Michael Martin for bringing this piece to our
What Happens When the Poor Receive a Stipend?

By Moises Velasquez-Manoff

Growing up poor has long been associated with reduced educational
attainment and lower lifetime earnings. Some evidence also suggests a
higher risk of depression, substance abuse and other diseases in
adulthood. Even for those who manage to overcome humble beginnings,
early-life poverty may leave a lasting mark, accelerating aging and
increasing the risk of degenerative disease in adulthood.

Today, more than one in five American children live in poverty. How,
if at all, to intervene is almost invariably a politically fraught
question. [See
]Scientists interested in the link between poverty and mental health,
however, often face a more fundamental problem: a relative dearth of
experiments that test and compare potential interventions.

So when, in 1996, the Eastern Band of Cherokee Indians in North
Carolina's Great Smoky Mountains opened a casino, Jane Costello, an
epidemiologist at Duke University Medical School, saw an opportunity.
The tribe elected to distribute a proportion of the profits equally
among its 8,000 members. Professor Costello wondered whether the
extra money would change psychiatric outcomes among poor Cherokee

When the casino opened, Professor Costello had already been following
1,420 rural children in the area, a quarter of whom were Cherokee,
for four years. That gave her a solid baseline measure. Roughly
one-fifth of the rural non-Indians in her study lived in poverty,
compared with more than half of the Cherokee. By 2001, when casino
profits amounted to $6,000 per person yearly, the number of Cherokee
living below the poverty line had declined by half.

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." [Se ]

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. [See ]

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

What precisely did the income change? Ongoing interviews with both
parents and children suggested one variable in particular. The money,
which amounted to between one-third and one-quarter of poor families'
income at one point, seemed to improve parenting quality. [See ]

Vickie L. Bradley, a tribe member and tribal health official, recalls
the transition. Before the casino opened and supplements began,
employment was often sporadic. Many Cherokee worked "hard and long"
during the summer, she told me, and then hunkered down when jobs
disappeared in the winter. The supplements eased the strain of that
feast-or-famine existence, she said. Some used the money to pay a few
months' worth of bills in advance. Others bought their children
clothes for school, or even Christmas presents. Mostly, though, the
energy once spent fretting over such things was freed up. That "helps
parents be better parents," she said.

A parallel study at the University of North Carolina at Chapel Hill
also highlights the insidious effect of poverty on parenting. The
Family Life Project, now in its 11th year, has followed nearly 1,300
mostly poor rural children in North Carolina and Pennsylvania from
birth. Scientists quantify maternal education, income and
neighborhood safety, among other factors. The stressors work
cumulatively, they've found. The more they bear down as a whole, the
more parental nurturing and support, as measured by observers,
declines. [See ]

By age 3, measures of vocabulary, working memory and executive
function show an inverse relationship with the stressors experienced
by parents.

These skills are thought important for success and well-being in
life. Maternal warmth can seemingly protect children from
environmental stresses, however; at least in these communities,
parenting quality seems to matter more to a child than material
circumstances. On the other hand, few parents managed high levels of
nurturing while also experiencing great strain. All of which
highlights an emerging theme in this science: Early-life poverty may
harm, in part, by warping and eroding the bonds between children and
caregivers that are important for healthy development.

Evidence is accumulating that these stressful early-life experiences
affect brain development. In one recent study, scientists at the
Washington University School of Medicine in St. Louis followed 145
preschoolers between 3 and 6 years of age for up to 10 years,
documenting stressful events - including deaths in the family,
fighting and frequent moves - as they occurred. When they took
magnetic resonance imaging scans of subjects' brains in adolescence,
they observed differences that correlated with the sum of stressful
events. [See ]

Early-life stress and poverty correlated with a shrunken hippocampus
and amygdala, brain regions important for memory and emotional
well-being, respectively. Again, parental nurturing seemed to protect
children somewhat. When it came to hippocampal volume in particular,
parental warmth mattered more than material poverty.

The prospective nature of both studies makes them particularly
compelling. But as always with observational studies, we can't assume
causality. Maybe the children's pre-existing problems are stressing
the parents. Or perhaps less nurturing parents are first depressed,
and that depression stems from their genes. That same genetic
inheritance then manifests as altered neural architecture in their

Numerous animal studies, of course, show that early life stress can
have lifelong consequences, and that maternal nurturing can prevent
them. Studies on rats, for example, demonstrate that even when pups
are periodically stressed, ample maternal grooming prevents unhealthy
rewiring of their nervous systems, favorably sculpting the developing
brain and making the pups resilient to stress even in adulthood.

Yet in observational human studies, it's difficult to rule out the
possibility that the unwell become poor, or that some primary
deficiency stresses, impoverishes and sickens. This very uncertainty
is one reason, in fact, that Professor Costello's findings are so
intriguing, however modest her study size. A naturally occurring
intervention ameliorated psychiatric outcomes. A cash infusion in
childhood seemed to lower the risk of problems in adulthood. That
suggests that poverty makes people unwell, and that meaningful
intervention is relatively simple.

Bearing that in mind, Randall Akee, an economist at the University of
California, Los Angeles, and a collaborator of Professor Costello's,
argues that the supplements actually save money in the long run. He
calculates that 5 to 10 years after age 19, the savings incurred by
the Cherokee income supplements surpass the initial costs - the
payments to parents while the children were minors. That's a
conservative estimate, he says, based on reduced criminality, a
reduced need for psychiatric care and savings gained from not
repeating grades. (The full analysis is not yet published.)

But contrary to the prevailing emphasis on interventions in infancy,
Professor Akee's analysis suggests that even help that comes later -
at age 12, in this case - can pay for itself by early adulthood. "The
benefits more than outweigh the costs," Emilia Simeonova, a Johns
Hopkins Carey Business School economist and one of Professor Akee's
co-authors, told me. [See

Not all changes in the Cherokee's "natural experiment" were benign,
however. For reasons neither Professor Costello nor Professor Akee
can explain, children who were the poorest when the supplements began
also gained the most weight. [See ]

Another analysis, meanwhile, found that more accidental deaths
occurred during those months, once or twice a year, when the tribe
disbursed supplements. The authors attributed that, in part, to
increased drinking, as well as to buying cars and traveling more.
[See ]

Then there's the broader context of gaming, an often contentious
issue around the country. Opponents often cite the potential for
increases in crime, problem gambling and bankruptcies. And some early
studies suggest these concerns may have merit. [See

But Douglas Walker, an economist at the College of Charleston who has
done some consulting for pro-gaming organizations, says many of the
studies on gaming have methodological problems. Increased criminal
behavior may simply be a function of more visitors to the casino
area, he says. If the population increases periodically, it's natural
to expect crime to rise proportionally. "The economic and social
impacts of casinos are not as clear, not as obvious as they seem," he

So Professor Costello's findings are not necessarily a sweeping
endorsement of Native American gaming, and casinos generally. Rather,
they suggest that a little extra money may confer long-lasting
benefits on poor children. And in that respect, the Cherokee
experience is unique in several important ways.

First, this was not a top-down intervention. The income supplements
came from a business owned by the beneficiaries. The tribe decided
how to help itself. Moreover, the supplements weren't enough for
members to stop working entirely, but they were unconditional. Both
attributes may avoid perverse incentives not to work.

Also, fluctuations in the casino business aside, the supplements
would continue indefinitely. That "ad infinitum" quality may both
change how the money is spent and also protect against the corrosive
psychological effects of chronic uncertainty.

And maybe most important, about half the casino profits went to
infrastructure and social services, including free addiction
counseling and improved health care. Ann Bullock, a doctor and
medical consultant to the Cherokee tribal government, argues that
these factors together - which she calls the exercising of
"collective efficacy" - also may have contributed to the improved
outcomes. She describes a "sea change" in the collective mood when
the tribe began to fund its own projects. A group that was
historically disenfranchised began making decisions about its own

"You feel controlled by the world when you're poor," she said. "That
was simply no longer the case."

Professor Costello and Professor Akee don't entirely agree. They
think cold hard cash made the real difference. For one thing,
Professor Akee says, outcomes started improving as soon as the
supplements began, before many of the communitywide services went
into effect.

If that's the primary takeaway, then we have some thinking to do.
Some people feel that "if you're poor, it's because you deserve it,"
Professor Costello said. "If you're sick, it's because you deserve
it," she said.

But if giving poor families with children a little extra cash not
only helps them, but also saves society money in the long run, then,
says Professor Costello, withholding the help is something other than

"You're not doing it because it pains you to do it," she said.
"That's a very valuable lesson for society to learn."
Moises Velasquez-Manoff is a science writer and the author of "An
Epidemic of Absence."
A version of this article appears in print on 01/19/2014, on page
SR12 of the NewYork edition with the headline: When the Poor Get Cash.
Jerry P. Becker
Dept. of Curriculum & Instruction
Southern Illinois University
625 Wham Drive
Mail Code 4610
Carbondale, IL 62901-4610
Phone: (618) 453-4241 [O]
(618) 457-8903 [H]
Fax: (618) 453-4244