Guaranteed Income Increases Employment, Improves Financial and Physical Health
Results released on March 3, 2021 from the first year of the Stockton Economic Empowerment Demonstration (SEED) show guaranteed income drastically improves job prospects, financial stability and overall wellbeing of recipients. As Congress and the Biden administration debate the inclusion of pandemic stimulus aid, this new research counters long-held narratives that unrestricted cash payments disincentivize work.
SEED was a Randomized Control Trial that distributed $500 a month for 24 months to 125 recipients. The cash was unconditional, with no strings attached and no work requirements, and recipients were selected randomly from neighborhoods at or below Stockton’s median household income. An independent evaluation of the program was funded by the Evidence for Action program of the Robert Wood Johnson Foundation. The program’s entire $3 million budget was funded fully by philanthropic dollars, including a $1 million grant from the Economic Security Project.
Dr. Stacia West, an assistant professor in UT’s College of Social Work, along with Dr. Amy Castro Baker, an assistant professor at the University of Pennsylvania School of Social Policy & Practice (SP2), were tasked with evaluating the effects of SEED and the overall impact of guaranteed income in Stockton, CA. A number of the study’s contributing researchers, including Mina Addo, Mae Carlson, Pandora Crowder, Meagan Cusack, Jenna Steckel, Tooma Zaghloul, and Erin Coltrera, are SP2 staff, alumni, and students.
Results gathered from the first year, which spanned February of 2019 to February of 2020, found recipients obtained full-time employment at more than twice the rate of non-recipients. Recipients were less anxious and depressed, both over time and compared to the control group.
They also saw statistically significant improvements in emotional health, fatigue levels and overall wellbeing. Recipients had a greater ability to pay for unexpected expenses, which was particularly important as the research period covered in these results concluded just as the pandemic began.
“The last year has shown us that far too many people were living on the financial edge, and were pushed over it by COVID-19,” said former Stockton Mayor and Founder of Mayors for a Guaranteed Income, Michael Tubbs. “SEED gave people the dignity to make their own choices, the ability to live up to their potential and improved economic stability going into the turmoil of the pandemic.”
People spent the SEED money on basic needs, including food (nearly 37%), sales/merchandise (22%, on home goods, clothes/shoes and discount/dollar stores), utilities (11%) and auto costs (10%). Less than 1% was spent on alcohol and/or tobacco. More on the methodology and first year results can be found here. Full research spanning the two years of the project will be available in 2022. SEED led to the founding of Mayors for a Guaranteed Income, an initiative that includes several pilots and 40 mayors across the country advocating for a guaranteed income.