24-Month Financial Impacts from the Denver Basic Income Project

Abstract

Background

Guaranteed income initiatives provide unconditional cash to individuals and families and are often used to address issues related to poverty with the understanding that people know best how to meet their own needs. Two main components of guaranteed income are low-barrier access and unconditional use (Castro, 2020). Communities across the United States are piloting and testing guaranteed income with various populations such as individuals and families in poverty, mothers in low-income housing, and artists. The aim of this research is to test the impact of guaranteed income on financial well-being for adults experiencing homelessness.

Methods

The Denver Basic Income Project (DBIP) is a guaranteed income program for a random sample of 807 people experiencing homelessness in Denver, CO. In addition to monthly cash transfers, DBIP participants received a cell phone with a data plan. DBIP participants were randomly assigned to one of three payment groups. Payment group A participants received $1,000 a month for 12 months. Payment group B participants received $6,500 upon enrollment and $500 a month for the subsequent 11 months. Payment group C participants served as an active control condition and received $50 a month for 12 months. At the 12-month point of the program participants experienced a 2 month pause in payments and then an additional six months of payments. Data for the research comes from a participant long-form survey which took approximately 20 minutes to complete and was administered at five time points--at enrollment, six months, ten months, 18 months and 24 months (post-program) after enrollment.

Results

No statistically significant differences in financial well-being were observed between groups after 24 months in DBIP. However, participants in all three payment groups exhibited changes over time. More than 60% of participants in Groups A and B reported being able to pay bills at the program’s peak, but this percentage declined to 35% post-project. Participants in Groups A and B initially experienced an increase in bill-paying ability upon enrollment, followed by a decline after program payments ended. At enrollment, 20% of participants across all groups reported full-time employment. While Groups A and C saw no changes in full-time work over the study period, Group B participants experienced an increase in full-time employment, peaking at 36% at the 10-month mark. Additionally, 15% of participants across payment groups reported panhandling as a source of income at enrollment, which decreased to 5% by the 24-month time point.

Implications

DBIP findings are mixed. Descriptive statistics indicate financial improvements across all three payment groups during the payment period, followed by declines in financial well-being after payments ended. However, gains observed even in the active control group contribute to uncertainty about DBIP’s causal impact on financial well-being. More research is needed to better understand the effects of guaranteed income policies on people experiencing homelessness. Future studies should incorporate qualitative analyses, a true comparison group, and longitudinal designs to strengthen causal inferences.