Universal Basic Income (Again)

As seems to happen every time, there seem to be small positive effects offset by higher debt, resulting in no real improvement.

We provide new evidence on the causal effect of unearned income on consumption, balance sheets, and financial outcomes by exploiting an experiment that randomly assigned 1000 individuals to receive $1000 per month and 2000 individuals to receive $50 per month for three years. The transfer increased measured household expenditures by at least $300 per month. The spending impact is positive in most categories, and is largest for housing, food, and car expenses. The treatment increases housing unit and neighborhood mobility. We find noisily estimated modest positive effects on asset values, driven by financial assets, but these gains are offset by higher debt, resulting in a near-zero effect on net worth.

Alexander Bartik of University of Illinois, Urbana-Champaign and five others in The Impact of Unconditional Cash Transfers on Consumption and Household Balance Sheets: Experimental Evidence from Two US States