Cash transfers did not transform recipients' net worth or their mental or physical health.
A three-year analysis of unconditional cash stipends concluded that the initiative has had some success, but not the transformational impact its proponents hoped for.Silicon Valley billionaires and anti-poverty activists don’t have a lot in common, but in recent years they have joined forces around a shared enthusiasm: programmes that guarantee a basic income.
If proponents of unconditional cash hoped the findings of the OpenResearch study would prove its benefits once and for all, their hopes were at least partly dashed. People gained flexibility to spend on basic needs, but the cash didn’t transform their net worth or their mental or physical health. Some researchers and guaranteed-income proponents argue that the study shows cash transfers are only a small piece of the larger puzzle of how to improve the financial well-being of low-income people.
But most of the US$1,000 recipients did not see their net worth rise, because the cash infusion was often offset by greater debt, from vehicle loans and mortgages. And while the recipients of the large amount reported less stress in the first year of the study, that benefit had faded by the second year. There were no persistent improvements in measures of health like blood pressure, cholesterol or obesity.
The research provided some tentative answers. Cash recipients showed more interest in entrepreneurialism and schooling. But they didn’t work more. The cash recipients worked an average of 1.3 fewer hours weekly than the control group, amounting to eight days a year.
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