For three years, 1,000 people received $1,000 per month — no strings attached. They took better jobs. Some went back to school. Others started opening businesses.

Right away, the data clearly showed that cash helped people spend more on their basic needs. Those who received $1,000 monthly spent $67 more per month than the lower-paid group on food, $52 more on rent and $50 more on transportation. They also spent about 26 percent more financially supporting others, typically family members or children, suggesting that the beneficiaries of guaranteed income programs extend beyond the actual participants.

Some of the volunteers told the researchers that the money allowed them to stop living paycheck to paycheck and start imagining what they could do if they had more financial breathing room. Karina Dotson, OpenResearch’s research and insights manager, often heard participants talk about the cash giving them a “sense of self.” She said it “gave them head space to dream, to believe, to hope, to imagine a future they couldn’t imagine before.” Other research has found similar outcomes.

Those who received $1,000 monthly were 5 percent more likely to report having a budget, spending an average of 20 minutes more a month on finances than the group that received $50 monthly. The money also affected how much medical care people sought, how much they considered entrepreneurship or additional schooling and even the kinds of jobs they took. Those choices varied widely from person to person.

  • unmagical
    26·
    3 months ago

    Has there ever been a study that showed it wasn’t effective? When can we end these experiments and just implement it?

    • giloronfoo@beehaw.org
      2·
      3 months ago

      I suspect the studies with small numbers of spread out participants are missing the inflation effects.

      We need a study of a whole town to see if giving everyone extra money is going to make the price of everything go up by the same amount.

      I’m hopeful this is a good idea and would likely vote for it, but I worry a bit that it will be pointless in the end.

      • oktux@beehaw.org
        4·
        3 months ago

        One of my favorite charities, GiveDirectly, researched the effects of large cash transfers on inflation in Kenya.

        Vox has a good write-up: https://www.vox.com/future-perfect/2019/11/25/20973151/givedirectly-basic-income-kenya-study-stimulus

        GiveDirectly gave about $1,000 (or $1,871 in purchasing power terms) each to more than 10,500 households, through three transfers over the course of about eight months. The program amounted to about 15 percent of the GDP of the local area. For comparison, that’s about three times as much economic stimulus, relative to the size of the economy, as the 2008-09 stimulus packages in the US.

        They found that the cash transfers not only benefited recipients; they benefited people in nearby villages too because recipients spent more money, some of which went to their neighbors’ businesses. Contrary to some fears, there were no meaningful inflation effects, and there were no envy or jealousy effects where people close by who didn’t receive cash felt worse off after the intervention.

        Here’s a direct link to the published study, updated Nov. 2022: https://onlinelibrary.wiley.com/doi/full/10.3982/ECTA17945

        If you’re curious, they have info. about many of their research projects (a number of which are published and peer reviewed) at https://www.givedirectly.org/research-at-give-directly/

      • LoamImprovement@beehaw.org
        1·
        3 months ago

        I suspect the problem is they end up being targeted studies directed toward low-to-zero income individuals because trying to sustain that kind of disbursement across an entire town, even a smallish one of about 6-10K people, would be out of scope without a research grant approaching a billion dollars. That feels pretty unlikely to happen.