NBER posted an RCT of an unconditional cash transfer program in Texas and Illinois, providing low-income individuals with $1,000 per month ($12,000 per year) for 3 years. Quick take: High-quality RCT finds suggestive (not statistically significant) 4-5% reductions in labor hours and income over 2.5 years.

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Study Design:

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• The study randomly assigned 3,000 low-income individuals to treatment ($12k per year in cash transfers for 3 years) vs control (a nominal $600 per year). $12k per year is a very sizable transfer, comprising approximately 40% of sample members' household income prior to the program.

Findings:

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• The study found that, over the 2.5 years after study entry, treatment group members individually - as well as their households - worked 4-5% fewer hours per week vs controls. Individual and household income, excluding transfers, also fell 4-5% (by $1,500 per year for individuals, $2,500 per year for households).

• However, these findings were not statistically significant after adjusting for the many outcomes measured, so are suggestive but not definitive. (The reduction in individuals' hours worked per week was close to significance, p=0.07, so is more reliable than others.)

• The study found no discernible effects on potential positive outcomes - e.g., quality of employment, college enrollment, time spent on child care. It found suggestive evidence (not statistically significant) of an increase in leisure time.

Comment:

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• Based on careful review, this was a high-quality RCT (e.g., large sample, low attrition). I believe the study abstract, below, is mostly accurate with one key omission: none of the main findings it discusses were statistically significant (though a couple were near-significant).