THE EMPLOYMENT EFFECTS OF A GUARANTEED INCOME: EXPERIMENTAL EVIDENCE FROM TWO U.S. STATES

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Conflicts of Interest

Identified Weaknesses

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Paper Summary

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A Thousand Bucks a Month? They Worked Less, Chilled More, and Got a Little More Entrepreneurial (Maybe)

This study examines the effects of a three-year unconditional cash transfer of $1,000 per month on low-income individuals in two US states. The transfers led to a moderate decrease in work hours and earnings, with recipients primarily using the extra time for leisure. While there were no significant improvements in job quality or human capital investments overall, some suggestive evidence indicates younger participants may pursue more formal education and that individuals exhibit more interest in entrepreneurship as a result of the transfers.

Possible Conflicts of Interest

The authors acknowledge funding from the National Science Foundation (NSF) and private donors.

Identified Weaknesses

Limited generalizability to higher income groups

Although the study targeted a wide range of incomes (up to 300% of the Federal Poverty Level), the average household income of participants was still relatively low ($29,900). This limits the generalizability of the findings to higher income populations.

No long-term follow up

The study found no significant impact on quality of employment or human capital investments. While this is an important null finding, it leaves open the question of whether longer-term outcomes might differ.

Specific effect of unconditional vs. conditional or size of transfer is unknown

It's unclear whether the observed effects are due to the specific amount of the transfer or the fact that it was unconditional. Future research comparing different transfer amounts and conditions would be valuable.

Rating Explanation

This is a well-designed study with a large sample size and rigorous methodology (RCT) addressing an important policy question. The combination of survey, administrative, and mobile phone data allows for a comprehensive analysis of the impacts of unconditional cash transfers. Although there is no long-term follow up, and limited generalizability to higher-income populations, the study makes a significant contribution to the literature.

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