The Effects of Unconditional Cash Transfers on Child Abuse and Neglect in Early Childhood: Evidence from New Zealand

Background Child abuse and neglect are found at higher rates in families with low incomes, and in contexts with lower public spending on families. However, it is not clear whether modest cash transfers could reduce rates. Objective To know the effects of unconditional cash transfers to mothers with children under 3 years of age on child abuse and neglect. Setting and Participants In 2018, New Zealand - an ethnically diverse rich democracy with above average child poverty - introduced a "Families Package" of largely unconditional cash transfers for mothers of children aged 0-3. The majority of the package comprised a universal payment for children aged 0-1 of NZ$60 (US$37) a week, and a payment of up to that amount for families in all but the top third of incomes for children aged 1-3. Mothers chose whether to receive payments weekly, monthly or annually. We use administrative data for all children born in New Zealand between 2013 and 2019 (N=172,170). Method Difference-in-difference estimation compared the difference in child abuse and neglect for 3-year-olds born before and after the introduction of the Families Package in July 2018, with the differences between the same birth month periods for children born in the previous 3 years. Results The Families Package reduced child protective services’ referrals to family services in non- urgent cases of suspected maltreatment by 19% overall (OR: 0.81, CI: 0.80-0.81, p=0.003), and by 26% (OR: 0.74, CI: 0.61-0.91, p=0.003) for M ̄aori, the indigenous people. It also reduced substantiated cases of neglect in single mother families (OR 0.6, CI 0.38 - 0.93, p=0.022). There were no significant effects on urgent cases, substantiations of physical or emotional abuse, or hospitalizations for traumatic brain injuries. Conclusions Small unconditional cash transfers in early childhood can lead to meaningful reductions in non-acute cases of suspected child abuse and neglect among at-risk groups.