Welfare and the Well-Being of Children: The Relative Effectiveness of Cash and In-Kind Transfers

Cash transfers to families with children are being restricted increasingly to parents who work, while families of nonworking parents are receiving a progressively larger share of their benefits in kind. This paper provides an evaluation of the empirical evidence regarding the effects of in-kind and cash-transfer programs on the children who are their intended beneficiaries. A distinction is made between in-kind transfer programs, such as the Food Stamp Program, which provide transfers to families that are earmarked for certain purposes, and programs such as Medicaid that provide specific services directly to children. Although the evidence is incomplete, it suggests that in-kind programs have stronger effects on children than cash transfers, and that programs that target specific benefits directly to children have the largest positive effects.