When a California city gave people a guaranteed income, they worked more — not less

The city of Stockton, California, embarked on a bold experiment two years ago: It decided to distribute $500 a month to 125 people for 24 months — with no strings attached and no work requirements. The people were randomly chosen from neighborhoods at or below the city’s median household income, and they were free to spend the money any way they liked. Meanwhile, researchers studied what impact the cash had on their lives.

The results from the first year of the experiment, which spanned from February 2019 to February 2020, are now in. And they’re extremely encouraging for its participants, and for advocates who see unconditional cash transfers as an effective way to help people escape poverty.

The most eye-popping finding is that the people who received the cash managed to secure full-time jobs at more than twice the rate of people in a control group, who did not receive cash. Within a year, the proportion of cash recipients who had full-time jobs jumped from 28 percent to 40 percent. The control group saw only a 5 percent jump over the same period.

The researchers wrote in their report that the money gave recipients the stability they needed to set goals, take risks, and find new jobs. One man in his 30s had been eligible for a real estate license for over a year but hadn’t gotten it because he just couldn’t afford to take time off work. Thanks to the freedom offered by the extra $500 per month, he said, his life was “converted 360 degrees … because I have more time and net worth to study … to achieve my goals.”

Leave a Comment