The Impact of Guaranteed Income on Finances, Health, and Agency

Background:

The Stockton Economic Empowerment Demonstration (SEED), was the nation’s first guaranteed income (GI) experiment since the 1980s. SEED gave 125 Stocktonians an unconditional $500 per month for 24 months. While prior research has demonstrated positive impacts of GI on health, financial, and overall well-being, many of these studies have occurred outside of the US context, are dated, or without causal designs (Marinesecu, 2017). With data from the SEED experiment, we ask: how does GI impact income volatility and financial wellbeing, health and wellbeing, and agency over one’s future?

Methods:

This experiment employed a mixed-methods RCT with address based random sampling. Recruitment mailers were sent to 4,200 households; 478 respondents completed the baseline survey, and were randomized to treatment (n=125) and control (n=200). Online surveys were given at baseline, enrollment, and every six months thereafter, and measured financial wellbeing, employment, physical health and wellbeing (Short Form Health Survey 36 [SF-36]), and mental health (Kessler 10). Income volatility was measured with monthly SMS surveys. A purposive qualitative sample of 50 participants participated in semi-structured interviews.

Income volatility was calculated by the coefficient of variation (Morduch & Siwicki, 2017). Between and within subjects effects of the SF-36 and Kessler 10 were tested with a t-test. Descriptive statistics were calculated for employment changes and financial wellbeing. Thematic analysis informed by structural coding was used to capture social network relationships and decision pathways were used alongside value/affect coding (Saldana, 2009).

Findings:

The treatment group’s ability to cover a $400 emergency expense with cash or cash alternative increased 27 percentage points, compared to only 3 percentage points for control. Individuals had more liquidity to pay for unexpected expenses and liquidity was ‘pooled’ across fragile family networks alleviating strain from unpaid care work, food insecurity, and underemployment. Month over month income volatility was 21% lower for the treatment group than the control. T-tests of the Kessler 10 indicated the treatment group reported lower incidence of anxiety and depressive symptoms than the control group over time. At baseline, there was no significant difference in the treatment and control group’s scores on any of the 8 subscales of the SF-36. At endline, compared to the control, the treatment group showed statistically significant improvements in emotional health, energy over fatigue, emotional wellbeing, and pain. Decreases in anxiety, depression, and extreme financial strain increased capacity for goal-setting and coping with unexpected shocks, and were apparent in shifts toward agency that led toward full time employment. The treatment group’s rate of full time employment jumped 12 percentage points compared to only 5 percentage points in control.

Conclusion:

These findings suggest a causal link between receipt of a GI and alleviation of consequences of poverty including income volatility, poor mental and physical health, and limited agency over one’s future. This, along with the recent launch of nearly 40 pilots across the country, indicates GI may soon be one additional piece of the US social safety net.