IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/24337.html
   My bibliography  Save this paper

No Strings Attached: The Behavioral Effects of U.S. Unconditional Cash Transfer Programs

Author

Listed:
  • Ioana Marinescu

Abstract

The universal basic income has become a widely discussed measure in policy circles around the world. In this review, we cover the evidence relevant to its potential impact in the US, and in developed countries more generally. Many studies find no statistically significant effect of an unconditional cash transfer on the probability of working. In the studies that do find an effect on labor supply, the effect is small: a 10% income increase induced by an unconditional cash transfer decreases labor supply by about 1%. The evidence shows that an unconditional cash transfer can improve health and educational outcomes, and decrease criminality and drug & alcohol use, especially among the most disadvantaged youths.

Suggested Citation

  • Ioana Marinescu, 2018. "No Strings Attached: The Behavioral Effects of U.S. Unconditional Cash Transfer Programs," NBER Working Papers 24337, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24337
    Note: LS PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w24337.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ugo Colombino, 2019. "Is unconditional basic income a viable alternative to other social welfare measures?," IZA World of Labor, Institute of Labor Economics (IZA), pages 128-128, March.
    2. Evans, David K. & Popova, Anna, 2014. "Cash transfers and temptation goods : a review of global evidence," Policy Research Working Paper Series 6886, The World Bank.
    3. Hum, Derek & Simpson, Wayne, 1993. "Economic Response to a Guaranteed Annual Income: Experience from Canada and the United States," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 263-296, January.
    4. Randall K. Q. Akee & William E. Copeland & Gordon Keeler & Adrian Angold & E. Jane Costello, 2010. "Parents' Incomes and Children's Outcomes: A Quasi-experiment Using Transfer Payments from Casino Profits," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 86-115, January.
    5. J. Patrick O'Brien & Dennis O. Olson, 1990. "The Alaska Permanent Fund and Dividend Distribution Program," Public Finance Review, , vol. 18(2), pages 139-156, April.
    6. David Cesarini & Erik Lindqvist & Matthew J. Notowidigdo & Robert Östling, 2017. "The Effect of Wealth on Individual and Household Labor Supply: Evidence from Swedish Lotteries," American Economic Review, American Economic Association, vol. 107(12), pages 3917-3946, December.
    7. Guido W. Imbens & Donald B. Rubin & Bruce I. Sacerdote, 2001. "Estimating the Effect of Unearned Income on Labor Earnings, Savings, and Consumption: Evidence from a Survey of Lottery Players," American Economic Review, American Economic Association, vol. 91(4), pages 778-794, September.
    8. Damon Jones & Ioana Marinescu, 2022. "The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 315-340, May.
    9. Jesse Rothstein, 2010. "Is the EITC as Good as an NIT? Conditional Cash Transfers and Tax Incidence," American Economic Journal: Economic Policy, American Economic Association, vol. 2(1), pages 177-208, February.
    10. Ashenfelter, Orley & Plant, Mark W, 1990. "Nonparametric Estimates of the Labor-Supply Effects of Negative Income Tax Programs," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 396-415, January.
    11. Banerjee, Abhijit & Hanna, Rema & Kreindler, Gabriel & Olken, Benjamin A., 2015. "Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide," Working Paper Series 15-076, Harvard University, John F. Kennedy School of Government.
    12. Widerquist, Karl, 2005. "A failure to communicate: what (if anything) can we learn from the negative income tax experiments?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(1), pages 49-81, February.
    13. Barbara Wolfe & Jessica Jakubowski & Robert Haveman & Marissa Courey, 2012. "The Income and Health Effects of Tribal Casino Gaming on American Indians," Demography, Springer;Population Association of America (PAA), vol. 49(2), pages 499-524, May.
    14. Lorenz Kueng, 2015. "Explaining Consumption Excess Sensitivity with Near-Rationality: Evidence from Large Predetermined Payments," NBER Working Papers 21772, National Bureau of Economic Research, Inc.
    15. Anna Aizer & Shari Eli & Joseph Ferrie & Adriana Lleras-Muney, 2016. "The Long-Run Impact of Cash Transfers to Poor Families," American Economic Review, American Economic Association, vol. 106(4), pages 935-971, April.
    16. Anna, Petrenko, 2016. "Мaркування готової продукції як складова частина інформаційного забезпечення маркетингової діяльності підприємств овочепродуктового підкомплексу," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 2(1), March.
    17. Gary Burtless, 1986. "The work response to a guaranteed income: a survey of experimental evidence," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 30, pages 22-59.
    18. Chang-Tai Hsieh, 2003. "Do Consumers React to Anticipated Income Changes? Evidence from the Alaska Permanent Fund," American Economic Review, American Economic Association, vol. 93(1), pages 397-405, March.
    19. repec:iza:izawol:journl:y:2015:p:128 is not listed on IDEAS
    20. Rebecca A. Maynard & Richard J. Murnane, 1979. "The Effects of a Negative Income Tax on School Performance: Results of an Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 14(4), pages 463-476.
    21. Philip K. Robins, 1985. "A Comparison of the Labor Supply Findings from the Four Negative Income Tax Experiments," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 567-582.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giulia Giupponi, 2019. "When income effects are large: labor supply responses and the value of welfare transfers," CEP Discussion Papers dp1651, Centre for Economic Performance, LSE.
    2. Ravallion, Martin, 2019. "Guaranteed employment or guaranteed income?," World Development, Elsevier, vol. 115(C), pages 209-221.
    3. René Böheim & Michael Topf, 2020. "Unearned income and labor supply: Evidence from survivor pensions in Austria," Economics working papers 2020-27, Department of Economics, Johannes Kepler University Linz, Austria.
    4. Rafael Novella & Laura Ripani & Claudia Vazquez, 2021. "Conditional cash transfers, female bargaining power and parental labour supply," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(2), pages 422-436, March.
    5. Óscar Afonso & Elena Sochirca & Pedro Cunha Neves, 2022. "Robots and Humans: The Role of Fiscal and Monetary Policies in an Endogenous Growth Model," CEF.UP Working Papers 2201, Universidade do Porto, Faculdade de Economia do Porto.
    6. Nishant Yonzan & Laxman Timilsina & Inas Rashad Kelly, 2020. "Economic Incentives Surrounding Fertility: Evidence from Alaska's Permanent Fund Dividend," NBER Working Papers 26712, National Bureau of Economic Research, Inc.
    7. Damon Jones & Ioana Marinescu, 2022. "The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 315-340, May.
    8. Tim Köhler & Haroon Bhorat, 2021. "Can cash transfers aid labour market recovery? Evidence from South Africa’s special COVID-19 grant," Working Papers 202108, University of Cape Town, Development Policy Research Unit.
    9. Rauh, Christopher & Rodrigues dos Santos, Marcelo, 2022. "How do transfers and universal basic income impact the labor market and inequality?," CEPR Discussion Papers 16993, C.E.P.R. Discussion Papers.
    10. Riddell, Chris & Riddell, William Craig, 2021. "Welfare versus work under a negative income tax: Evidence from the Gary, Seattle, Denver and Manitoba income maintenance experiments," CLEF Working Paper Series 36, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    11. Sarah Baird & David McKenzie & Berk Özler, 2018. "The effects of cash transfers on adult labor market outcomes," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-20, December.
    12. Eva Jacob, 2023. "Revenu de Base Inconditionnel : de la théorie à la pratique," Working Papers of BETA 2023-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    13. Giupponi, Giulia, 2019. "When income effects are large: labor supply responses and the value of welfare transfers," LSE Research Online Documents on Economics 103424, London School of Economics and Political Science, LSE Library.
    14. Yonzan, Nishant & Timilsina, Laxman & Kelly, Inas Rashad, 2024. "Economic incentives surrounding fertility: Evidence from Alaska’s permanent fund dividend," Economics & Human Biology, Elsevier, vol. 52(C).
    15. Munoz de Bustillo Llorente Rafael & FERNANDEZ MACIAS Enrique & GONZALEZ VAZQUEZ Ignacio, 2020. "Universality in Social Protection: An Inquiry about its Meaning and Measurement," JRC Research Reports JRC122953, Joint Research Centre.
    16. Colin D. Wooldridge & Andrew F. Johnson & Katherine J. Roberto, 2024. "Something for Everyone? Addressing Conservative Opposition to Universal Basic Income Programmes," Progress in Development Studies, , vol. 24(1), pages 68-76, January.
    17. Coelho, José, 2020. "Universal basic income and skill-biased technological change," MPRA Paper 99195, University Library of Munich, Germany, revised 20 Mar 2020.
    18. Oscar Afonso & Rosa Forte, 2023. "How powerful are fiscal and monetary policies in a directed technical change model with humans and robots?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3008-3032, July.
    19. Maximilian Kasy & Lukas Lehner, 2023. "Employing the Unemployed of Marienthal: Evaluation of a Guaranteed Job Program," CESifo Working Paper Series 10394, CESifo.
    20. Atheendar S Venkataramani & Rourke O’Brien & Gregory L Whitehorn & Alexander C Tsai, 2020. "Economic influences on population health in the United States: Toward policymaking driven by data and evidence," PLOS Medicine, Public Library of Science, vol. 17(9), pages 1-17, September.
    21. Wilson, Naomi & McDaid, Shari, 2021. "The mental health effects of a Universal Basic Income: A synthesis of the evidence from previous pilots," Social Science & Medicine, Elsevier, vol. 287(C).
    22. Riedl Drew, 2020. "Financing Universal Basic Income: Eliminating Poverty and Bolstering the Middle Class While Addressing Inequality, Economic Rents, and Climate Change," Basic Income Studies, De Gruyter, vol. 15(2), pages 1-34, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Damon Jones & Ioana Marinescu, 2022. "The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 315-340, May.
    2. Giupponi, Giulia, 2019. "When income effects are large: labor supply responses and the value of welfare transfers," LSE Research Online Documents on Economics 103424, London School of Economics and Political Science, LSE Library.
    3. Hilary W. Hoynes & Jesse Rothstein, 2019. "Universal Basic Income in the US and Advanced Countries," NBER Working Papers 25538, National Bureau of Economic Research, Inc.
    4. Manuela A. de Paz-Báñez & María José Asensio-Coto & Celia Sánchez-López & María-Teresa Aceytuno, 2020. "Is There Empirical Evidence on How the Implementation of a Universal Basic Income (UBI) Affects Labour Supply? A Systematic Review," Sustainability, MDPI, vol. 12(22), pages 1-36, November.
    5. David J. Price & Jae Song, 2018. "The Long-Term Effects of Cash Assistance," Working Papers 621, Princeton University, Department of Economics, Industrial Relations Section..
    6. Panos Mavrokonstantis & Arthur Seibold, 2022. "Bunching and Adjustment Costs: Evidence from Cypriot Tax Reforms," CESifo Working Paper Series 9773, CESifo.
    7. Andrew Bibler & Mouhcine Guettabi & Matthew N. Reimer, 2023. "Universal Cash Transfers and Labor Market Outcomes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 198-224, January.
    8. Giulia Giupponi, 2019. "When income effects are large: labor supply responses and the value of welfare transfers," CEP Discussion Papers dp1651, Centre for Economic Performance, LSE.
    9. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2021. "Parental Resources and College Attendance: Evidence from Lottery Wins," American Economic Review, American Economic Association, vol. 111(4), pages 1201-1240, April.
    10. Riddell, Chris & Riddell, W. Craig, 2021. "Welfare versus Work under a Negative Income Tax: Evidence from the Gary, Seattle, Denver and Manitoba Income Maintenance Experiments," IZA Discussion Papers 14585, Institute of Labor Economics (IZA).
    11. Verlaat, Timo & Todeschini, Federico & Ramos, Xavier, 2023. "The Employment Effects of Generous and Unconditional Cash Support," IZA Discussion Papers 15976, Institute of Labor Economics (IZA).
    12. Xavier Ramos & Timo Verlaat & Federico Todeschini, 2023. "The Employment Effects of Generous and Unconditional Cash Support," Working Papers 638, ECINEQ, Society for the Study of Economic Inequality.
    13. Feinberg Robert M. & Kuehn Daniel, 2018. "Guaranteed Nonlabor Income and Labor Supply: The Effect of the Alaska Permanent Fund Dividend," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-13, July.
    14. Richard Dorsett, 2021. "A Bayesian structural time series analysis of the effect of basic income on crime: Evidence from the Alaska Permanent Fund," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(1), pages 179-200, January.
    15. Robert M. Feinberg & Daniel Kuehn, 2020. "Does a Guaranteed Basic Income Encourage Entrepreneurship? Evidence from Alaska," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 607-626, November.
    16. Andreas Fagereng & Martin B. Holm & Gisle J. Natvik, 2021. "MPC Heterogeneity and Household Balance Sheets," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(4), pages 1-54, October.
    17. Adriana Lleras‐Muney, 2022. "Education and income gradients in longevity: The role of policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(1), pages 5-37, February.
    18. Salehi-Isfahani, Djavad & Mostafavi-Dehzooei, Mohammad H., 2018. "Cash transfers and labor supply: Evidence from a large-scale program in Iran," Journal of Development Economics, Elsevier, vol. 135(C), pages 349-367.
    19. Cavit Baran & Eric Chyn & Bryan A. Stuart, 2022. "The Great Migration and Educational Opportunity," Upjohn Working Papers 22-367, W.E. Upjohn Institute for Employment Research.
    20. Dominik Sachs & Aleh Tsyvinski & Nicolas Werquin, 2020. "Nonlinear Tax Incidence and Optimal Taxation in General Equilibrium," Econometrica, Econometric Society, vol. 88(2), pages 469-493, March.

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:24337. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.