Evaluating Guaranteed Income Projects

Abstract Local lawmakers are currently piloting their desired next nationwide expansion of the welfare state. Dozens of guaranteed income pilots are running across the country at the local and state level, sometimes funded by COVID-19 relief funds, to encourage federal policymakers to implement cash grants without work requirements, restrictions, or conditions. These guaranteed income pilots are a precursor to these policymakers’ ultimate goal: establishing a universal basic income, an extraordinarily expensive proposal that can lead to less work, particularly among low-income recipients. When considering these initiatives, policymakers should ensure that the primary long-term outcomes are more work attachment and hours worked, less safety-net dependence, and better overall outcomes for children, including improving children’s likelihood of being raised in a married household. Read the full pdf . Introduction Dozens of new welfare experiments, called guaranteed income pilots, have launched in cities throughout the United States over the past few years. Their goal is to prove that important outcomes such as economic stability, child educational attainment, and even mental health will improve if low-income citizens are given direct cash aid without work or other requirements (Campos et al. 2023; West et al. 2021). The local guaranteed income pilots are purposely similar to the Biden administration’s expanded child tax credit (CTC). In its 2022 year-end report, Mayors for a Guaranteed Income (2023), which now consists of 125 mayors with dozens of pilots in 34 states, has highlighted that its pilots’ intended purpose is to encourage the federal movement to relaunch: “There is a very real chance to revive the expanded CTC,” which it defines as “a guaranteed income for families with children.” From the evidence currently available, if guaranteed income is nationally implemented, it could harm lower-income Americans by disincentivizing work. In the long run, this would likely have negative consequences for the citizens the programs seek to help because employment, not merely transfer payments, is key to overcoming poverty and exiting dependency. As these experiments progress, it’s essential to assess the pilots by a holistic set of outcomes over an appropriate time frame. State- and local-level experiments should measure medium- to long-term impacts of work attachment, hours worked, safety-net dependence, and overall child educational outcomes. Carefully constructed experimental design is crucial to ensuring researchers can effectively measure outcomes and inform public policy. However, even if these experiments possess a flawless experimental design, they would still be unable to simulate what effect guaranteed income would have on social norms regarding work, marriage, and dependence if the programs were nationalized. At best, researchers may be able to draw inferences on the possible local effects of the programs if they were permanently implemented, but the experiments’ localized nature is insufficient to draw national conclusions. Read the full report . References Adamczyk, Alicia. 2021. “Economists Say Adding a Child Tax Credit Work Requirement Would Harm the Neediest Kids.” CNBC. September 29. https://www.cnbc.com/2021/09/29/economists-say-child-tax-credit-work-requirement-harms-neediest-kids.html . Akee, Randall K. Q., William E. Copeland, Gordon Keeler, Adrian Angold, and E. Jane Costello. 2010. “Parents’ Incomes and Children’s Outcomes: A Quasi-Experiment Using Transfer Payments from Casino Profits.”