Children growing up in poverty often receive poor education, little medical attention, and inadequate nutrition. As a result, they may enter adulthood without the basic capabilities necessary to take advantage of labor market opportunities and pull themselves out of poverty. They are likely to have substantially lower wages, and may therefore be less likely to be able to provide the necessary resources for their own children, perpetuating the cycle of poverty. In order to break this inter-generational transmission of poverty, many governments, particularly in Latin America, have turned to conditional cash transfer (CCT) programs to incentivize parents to invest in their children's health and wellbeing, while providing cash transfers to improve their current welfare.

There is substantial evidence that, in the short term, CCT programs improve health and nutritional outcomes for children early in life. However, few studies to date have looked at the effect of CCT programs on child cognitive, language, or motor development. And the relative importance of the increase in household income versus the increase in preventive health behaviors in affecting health outcomes is still imperfectly understood.