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Opinion | New study finds Rx Kids can stabilize households, boost economy
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Rx Kids is a first-of-its-kind program that provides direct payments to expecting families of $1,500 before the birth of their child and $500 a month for up to a year after the birth of their child. Launched in more than a dozen Michigan communities so far, it is helping thousands of new parents financially adjust to one of the biggest changes of their lives.
In Flint, the first Rx Kids community, we now know the program is also boosting local and regional economies.
A new Upjohn Institute analysis of the Flint program, which began in 2024 and is jointly publicly and privately funded, found that it increased local per-capita income by $2.40 for every dollar spent. While it may seem obvious that sending people money will increase their income, the effects are much more interesting and wide-ranging than that.
The analysis found that an additional 100-200 jobs will be created in Michigan each of the first five years of the Flint program. This is directly tied to the increased spending that the cash payments generate—one person’s spending is another person’s pay. Nearly all of the spending stays local, so the multiplier effect is strong. And the benefits tend to go to families with the lowest incomes, though the program is for whole communities, it focuses on areas of highest need. The program is also estimated to contribute to higher wages, minor population growth from in-migration and increased property values.
The report has several implications. The Rx Kids program shows that direct payments to new parents not only stabilize household finances but also lift employment, wages and total income across the community. This type of support for families thus can also function as an indirect regional economic development strategy.
The analysis also suggests that the Rx Kids program can yield high economic returns. The initial investment of $10 million in direct payments to Flint area families is estimated to have created as much as $40 million in additional income per year across the region. That’s not insignificant.
This study represents the first economic impact analysis of the Rx Kids program. Continued evaluation will be needed to assess longer-term outcomes and to understand how results may vary across communities.
Potential changes in state funding levels will affect the scale and pace of the program’s growth and, by extension, its downstream economic impact.
As policymakers consider the future of Rx Kids, the findings from Flint provide early evidence on how direct support for families can boost the outlook for local economies across Michigan.
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