Giving Compass' Take:
- Sigal Samuel reports on preliminary results from an experiment in Stockton, California, that found that recipients of monthly $500 cash transfers made employment gains when compared to a control group.
- How might the effects of a universal basic income (UBI) compare to results observed in smaller experiments? How can funders support research and ideation on policy tools that can help to reduce poverty and increase quality of life?
- Read about developing better UBI pilot programs.
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The city of Stockton, California, embarked on a bold experiment two years ago: It decided to distribute $500 a month to 125 people for 24 months — with no strings attached and no work requirements. The people were randomly chosen from neighborhoods at or below the city’s median household income, and they were free to spend the money any way they liked. Meanwhile, researchers studied what impact the cash had on their lives.
The results from the first year of the experiment, which spanned from February 2019 to February 2020, are now in. And they’re extremely encouraging for its participants, and for advocates who see unconditional cash transfers as an effective way to help people escape poverty.
The most eye-popping finding is that the people who received the cash managed to secure full-time jobs at more than twice the rate of people in a control group, who did not receive cash. Within a year, the proportion of cash recipients who had full-time jobs jumped from 28 percent to 40 percent. The control group saw only a 5 percent jump over the same period.
Critics of cash assistance programs often say that handing out “free money” will make people less inclined to find jobs. But in the research done to date, unconditional cash does not tend to disincentivize work. In several programs — from Alaska and North Carolina in the US, to Finland and Spain in Europe — it has had no effect on employment either way. In some cases, it seems to embolden people with an entrepreneurial bent; for instance, in Japan, initial survey results have shown that recipients are 3.9 times more interested in launching a new business.
Employment aside, there are clear benefits to unconditional cash programs. The Stockton experiment — which was conducted as a randomized controlled trial and underwent an independent evaluation — adds to the growing body of evidence from basic income experiments around the world, which shows that getting unconditional cash tends to boost happiness, health, school attendance, and trust in social institutions, while reducing crime.
Read the full article about universal basic income by Sigal Samuel at Vox.