Survey suggests UBI has minimal impact.
Last October, I reported on a study that gave participants $1,000 a month and measured the impacts of the transfer. The results were disappointing to advocates of universal basic income (UBI). To summarize, the study found that people worked less, and, according to the researchers:
[Participants] used the time they gained from working less to engage in leisure, and there is no evidence of an increased use of time in other categories UBI proponents purport to care about, such as creative output, entrepreneurship, community engagement, self-improvement, or even spending time with children.
A second study on guaranteed income had similarly underwhelming results.
In a recent paper from the National Bureau of Economic Research (NBER), researchers Patrick K. Krause, Elizabeth Rhodes, Sarah Miller, Alexander W. Bartik, David E. Broockman, and Eva Vivalt examined the effects of unconditional cash transfers on parental behavior and children.
In this study, 1,000 participant families received $1,000 per month over three years, while a control group of 2,000 participants received just $50 per month. The study tracked the impact (or lack thereof) of this financial support on parenting behaviors and outcomes.
Let’s get into the results, starting with the good news. Parents in the guaranteed income group spent more on their children. The researchers estimate an additional $43 per month went to food and $22 more to child care. This is unsurprising. As income increases, we expect people to increase spending. What is surprising, though, is that this additional spending did not lead to any tangible results such as improved food security.
The parents on the survey also self-reported improved parenting behaviors, including more direct supervision of their children.
However, other findings complicate that narrative. The researchers found no significant change in time spent on parenting activities, and no positive impact on household “order” according to participant surveys.
Parental attitude doesn’t seem to change, either. The authors say, “We do not find any change in [parental satisfaction] outcomes… similarly, we do not find that parents report being less stressed or experiencing less mental distress.”
Children did not show meaningful improvements. According to the PROMIS measure of social and emotional development, children in the guaranteed income households have no significant improvements relative to the control group. The outcome on educational performance seems similarly negligible:
Public school enrollment, attendance, rates of repeating a grade, participation in gifted and talented programs, and most standardized test score measures do not appear to be affected by the [income] transfer.
The transfer, according to some results, appeared to have a negative effect on math test scores. The statistical significance of that result depends on how the authors adjust the controls. The same is true for grade outcomes. Children of families who received the guaranteed income did worse, though the result’s significance drops out by some measures.
Behavior in school did not improve, either. The study finds “no effect of the transfer on disciplinary measures overall, nor on disciplinary action taken for a specific reason (i.e., student committed a felony, student had a drug, alcohol, or tobacco violation, student committed physical violence).”
One recent concern in the West is falling birthrates. While UBI policies are generally advocated by the left, some on the right have proposed cash payments. This study cast water on this argument as well. The research “rule[s] out increases of more than 0.03 additional children due to the transfer based on survey measures or 0.02 additional children based on administrative measures.”
Put differently, if you give a group of 100 families $1,000 a month of guaranteed income, only three would have an additional child (compared to what would happen without the transfer).
Taken together, this research illustrates another lackluster result for basic income advocates. There were improvements from the income on a couple of metrics, but the upshot is:
The transfer did not have a meaningful effect on most educational outcomes measured in school administrative records, nor did it affect characteristics of the home environment, child food security, exposure to homelessness, or parental satisfaction.
The biggest challenges of parenthood don’t seem to get much easier with a guaranteed income of $1,000 a month. While all studies have limitations, this paper, on top of the other recent large studies on guaranteed income, is offering a clear picture of what a UBI policy can and, more importantly, cannot improve.
