Guaranteed income programs might improve people's lives, but not their health

Jessica Rinaldi/The Boston Globe via Getty Images

 

Connecting state and local government leaders

A new study examining cash transfer programs' effects on participants' health found limited impact.

Money can buy you food, housing and other necessities, but cash handouts don't result in better health.

That’s according to a study published last month by the National Bureau of Economic Research of a guaranteed income program that gave people $1,000 every month over three years to spend as they wished. 

Across the U.S., guaranteed income programs have gained traction as a strategy to alleviate poverty and address income gaps, with more than 150 programs across 35 states announced since 2017, according to the Economic Security Project. The initiatives provide people, typically low-income, with cash payments to use at their discretion, like paying rent, buying groceries or investing in their education. 

The study is based on a three-year guaranteed income program conducted from 2020 to 2023 by the nonprofit research organization OpenResearch. During that time, 3,000 individuals ages 21 to 40 received monthly cash payments with no strings attached. Participants were located in Texas and Illinois and had an average household income of $30,000. They were divided in two groups: an experimental group of 1,000 people who received $1,000 every month and a control group of 2,000 who received $50.

The study found that while recipients in the experimental group spent slightly more on health care than those in the control group, they did not experience significant improvements in physical health, or even in mental health after the first year.

For policymakers, that means guaranteed income programs are not the most effective way to address health disparities between low-income and higher-income people, said Sarah Miller, lead author of the study and an associate professor at the Ross School of Business at the University of Michigan. 

To “get the most bang for your buck,” she said, “start with the policies that are actually about health. Don’t expect a guaranteed income [program] to be the thing to improve health.” 

However, researchers did find that the cash transfers gave people flexibility and allowed them to meet their specific needs and goals, said Elizabeth Rhodes, research director at OpenResearch. 

Also important, she said, is the fact that “the recipient’s circumstances really do change the options that the money creates.” 

Some participants, for instance, were able to work fewer hours because they had more income through the program. They reported using that extra time and money to go back to school, seek higher paying jobs or spend more time with their children, Rhodes said. The lowest-income participants, however, were more likely to use the money to meet basic needs like housing, food and transportation. 

But despite participants reporting high health needs—about 29% of individuals were uninsured and 27% said they skipped needed care due to cost at the start of the experiment—the data shows they didn't spend a significant amount of their monthly payments on health care services. 

However, program participants were slightly more likely to visit an emergency room and, on average, spent $20 more per month on health care and about $13 more on insurance premiums than those in the control group, Miller said.

It's important to note, she said, that participants did not report experiencing better access to care. Study findings show, for instance, “people using more dental care but also reporting that they’re skipping dental care,” which Miller said could be because patients realized they required more extensive, costly services after an initial appointment and decided not to pursue it further. 

Plus, self-reported and clinical data, including blood draws and measurements of blood pressure, cholesterol and other health indicators, from participants showed minimal and short-lived improvements, if any, she said. Participants reported a slight improvement in mental health and stress levels at the start of the program, for instance, but Miller said “we see these stress improvements basically go away after the first year.”  

Rhodes, of OpenResearch, said that could be because for low-income individuals who have experienced chronic poverty and income-related stress, “a short-term infusion of cash … can’t erase years of exposure” to those conditions. 

Policymakers should consider more direct interventions to improve individuals’ health, said Gina Hijjawi, senior program officer at the Robert Wood Johnson Foundation’s research evaluation and learning department. 

Cash transfers can impact overall well-being by allowing people to spend more time with their kids, purchase healthier food options or even spend money on leisure activities like going to the movie theater, she said, but “a safety net is not the final solution.” 

State legislators could instead leverage policies that increase the accessibility and affordability of health care, Hijjawi said. She pointed to Medicaid expansion as an example, which has helped more than 18 million low-income adults access health care as of December 2020. Ten states, including Texas—one of the participating states of OpenResearch’s cash transfer project—have yet to implement it. 

Officials should also invest in their communities to foster better living and health conditions, she said. That means investing in safe drinking water systems and standards, for instance, and addressing food deserts by developing meal assistance programs. 

Miller also pointed to the importance of reducing prescription drug costs to increase individuals’ ability to manage and prevent adverse health conditions. 

Guaranteed income programs may have some health benefits, like allowing more access to health care, which could improve health in the long run, Miller said. But “if you’re a policymaker, and you’re laser-focused on health,” she said, guaranteed income programs are “kind of a blunt instrument.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.