Over the past 15 years, the idea of giving everyone a “basic income” has been heralded as a promising solution for economic justice and even ending poverty. The California Democratic Party adopted it into its official platform back in 2018, and Andrew Yang ran on the promise of basic income during his 2020 presidential bid. The threat of unemployment from artificial intelligence has made the idea more buzzy.
But recent studies have found that giving poor people unrestricted cash did not produce lasting improvements in their mental health, stress, or, in some cases, even self-reported financial well-being — leading to renewed chatter on the merit of these cash transfers to the poor.
As I’ve tracked the discussion, I started thinking about the asymmetry between the cash transfers debate and another recent one on the “vibescession.” Back in 2022, when Americans reported feeling gloomy about the economy even as GDP was growing and unemployment was low, some political leaders and commentators scrambled to justify why those feelings made sense, pointing to inflation, housing costs, and general uncertainty.
It seems that leaders then bent over backward to defend middle-class Americans for not feeling great despite a strong economy, yet they seemed to expect low-income Americans to respond more predictably — and more positively — to cash aid.
The new research findings are disappointing, and it makes sense to think money should ease stress. It’s not outlandish to hope that a few extra thousand dollars a year would make people feel noticeably better. But if we take a step back, we can see that that’s not really how money works for people higher up the ladder, either. I know plenty of well-off individuals who still frequently feel anxious and stressed, and I’d bet you do, too.
There have been over 160 basic income pilots in the US and more studies all around the world. The debate is complicated, and some people may no longer be as excited about the idea. But the movement is still barreling forward, and it’s clear from my reporting that new pessimism in some corners is far from the full story.
Why people are talking about cash transfers again
Cash transfers are becoming increasingly polarized. Over the past two decades, researchers have coalesced around the promise of targeted, carefully timed interventions for vulnerable groups, but now, the federal government is slashing support for any project that even hints at diversity, equity, and inclusion. That risks hobbling large-scale experiments designed to study the very communities most affected by poverty.
Over the last few years, a half dozen states, including Arkansas, Idaho, and South Dakota, passed new bans on guaranteed income. The Republican bill sponsor for Iowa’s ban said he hoped his law would lead to programs that “foster independence, not dependence” and ensure people can “experience the dignity of work.” This is all happening despite cash transfers showing bipartisan appeal — from President Donald Trump’s stimulus checks to more recent talk of DOGE dividends.
Now comes a few new studies. The Baby’s First Years study recruited 1,000 new mothers. A randomized sample of moms received $333 per month for the first 52 months of their child’s life, and the control group of moms received $20 a month. Another study, led by OpenResearch, distributed $1,000 per month for three years to individuals earning under $30,000 a year on average in Texas and Illinois. (The control group received $50 per month.) These and some other basic income experiments failed to yield lasting gains across a host of physical, psychological, and financial measures.
The response has been animated, illuminating, and in some cases, pretty concerning.
On the right, critics of welfare have seized on the new research to argue that social policy rarely changes people; that cash aid may make things worse; and, of course, that family and job support “is more important” than unrestricted money. There’s a note of triumph, as if this data vindicates the view that the entire premise of no-strings-attached aid was misguided all along.
On the left, the debate has been more nuanced. Over at The Argument, my former Vox colleague Kelsey Piper said the new research dampened her enthusiasm for cash transfer as a policy tool but affirmed her belief that tackling poverty will require building and fixing schools, housing, and health care delivery. She stressed that the real question is not whether cash has a role, but whether it’s the best use of scarce political and fiscal capital.
Labor lawyer Matt Bruenig responded that the point of cash isn’t to “fix” people but to guarantee income for those outside the labor market — an essential task of any welfare state. He argued that dismissing cash because it doesn’t boost cognitive scores or reduce stress misses the point; its purpose is to cut poverty and provide basic security. And in the New Republic, Monica Potts made a similar case, writing that cash transfers were never meant to be a cure-all. Some Democrats now stress that, in an era of new Medicaid work requirements and shrinking food stamp benefits, this is the moment to double down on aid that’s easy to access, not shrink from it.
There’s no conspiracy on cash transfer research
One aspect of the debate is whether advocates misled the public on the transformative potential of cash. When Yang ran for president in 2020 on a platform of a guaranteed basic income, he promised voters that his idea would “make us stronger, healthier, mentally healthier, less stressed out, and more optimistic about the future.” Atlantic journalist Annie Lowrey published Give People Money, a 2018 book whose subtitle said universal basic income (UBI) “would end poverty, revolutionize work, and remake the world.”
Lowrey has always been measured about the trade-offs of basic income, and Yang was never as influential as he wished he was. But it’s worth confronting the concern more directly: Were people led astray?
Kelsey, and to a lesser extent, my Vox colleague Dylan Matthews have both criticized the media for not covering negative findings on cash transfers. “The press seems to prefer to cover the small pilots that show positive impacts” over the larger, more rigorous experiments that found negative results, according to one researcher Kelsey spoke to.
Though there are real examples of a “dangerous epistemic environment,” as Kelsey put it, I just don’t really think the reporting on cash transfer experiments is a great example of that.
I first read about disappointing cash transfer findings on this very website back in 2022, when Dylan did a clear-eyed review of the pandemic-era literature, and he acknowledged that the new studies complicated his own views on the idea.
Then, I learned about the more disappointing OpenResearch guaranteed income results last summer in the New York Times, our nation’s largest newspaper, in an article that stated plainly, “The initiative has had some success, but not the transformational impact its proponents hoped for.” The discourse in The Argument was then kicked off this summer thanks to another New York Times article by one of the country’s top poverty reporters who then recorded an episode on the findings for The Daily, one of the most popular podcasts in the US.
Digital media publishing has also changed a lot from even 10 years ago. The digital media business model used to focus more on short, quick news write-ups, and therefore there were more stories about single studies. Now, many editors are interested in fewer but more substantive stories.
Yet, I find a lot of readers still conclude there must be something more conspiratorial going on if they don’t read an article they rightly suspect they might have seen a decade ago.
Overall, any obituaries on the movement for cash assistance are premature.
So, what can we conclude now?
There are nuances to the disappointing new findings. Researchers and advocates have pointed out that the Baby’s First Years research, the high-profile study recently covered by the New York Times, was conducted partly during the pandemic, when the control group was receiving substantial cash transfers from the federal government anyway. The pandemic also caused unusually stressful disruptions to the lives of children and adults, which could obscure how well the money would have worked in circumstances other than a global public health emergency.
Cash keeps families housed and bills paid, helps parents afford child care, boosts children’s school attendance and graduation, improves physical and mental health, and sets kids up for higher earnings and stability as adults.
When it comes to the OpenResearch guaranteed income study, research director Elizabeth Rhodes emphasized that just because there wasn’t an average positive effect doesn’t mean some families didn’t benefit from the cash. “The study itself was not a referendum on a specific policy,” she said. Many participants experienced what she described as “one step forward, two steps back” — they wanted to save their monthly $1,000 but kept facing emergencies that forced them to spend it.
In other cases, she said, maybe a family now finally had money to pay for housing, but then they discovered they needed a credit score of 700 and three times the proposed rent in income, meaning that, even with the cash infusion, they still couldn’t move into better accommodations. Rhodes said her team is still trying to figure out which barriers inhibit people from thriving even with the subsidy and added that people with “any social support” seemed to do better than those navigating systems on their own.
More broadly, some point out that cash just can’t, on its own, solve market failures that exist in America for basics like health insurance, child care, and housing. And lastly, some researchers have spoken out to say some public criticisms, like “money did not make a difference” stretches far beyond what the actual research showed.
Here’s my take: It’s certainly possible that more conservatives and tech moguls lose enthusiasm for cash in part because of these studies. Last year, OpenAI’s Sam Altman mused that instead of a guaranteed income, perhaps people should receive guaranteed AI computing time. Other billionaires may discover new shiny interventions that excite them more.
But it would be a mistake to conclude these threats, and even the new randomized controlled trials, have halted the movement for cash aid in the US or abroad. Some local governments in California recently voted to invest more in cash transfer experiments, and a new GiveWell study recently found that cash grants in Kenya both cut poverty and saved lives. There are also other positive ongoing studies on cash transfers, like a program in Flint, Michigan, that gives pregnant women and new mothers aid. Early results have found the cash increased prenatal care, improved birth outcomes, and reduced postpartum depression.
In reporting this story, I learned that some funders are currently exploring new experiments to fund, and in some cases, at potentially much larger scale than has ever been tested in the US.
There’s still a lot of opportunity to help people materially and psychologically by giving them unrestricted money. These high-quality new studies need to be considered alongside a much broader, older, and continually evolving research base that emphasizes that cash matters for reducing poverty and hunger. It’s been shown over and over that cash keeps families housed and bills paid, helps parents afford child care, boosts children’s school attendance and graduation, improves physical and mental health, and sets kids up for higher earnings and stability as adults. We know cash helps people weather emergencies and access high-quality interventions like therapy that are too expensive for many.
I’ve spent the last few years reporting on the potential of tenants using cash instead of cumbersome housing vouchers. The idea is that landlords might be much more likely to accept cash because it’s more convenient than working with housing authorities for vouchers and that cash could be easier and more dignified for the tenants to use, too. These new studies have done nothing to change my optimism about that idea. In fact, just last week, a new randomized controlled trial found that direct cash rental assistance sharply reduced forced moves and homelessness while improving housing quality.
It does seem like we’re getting further from the utopic Silicon Valley vision of UBI as a panacea against automation, but I, and many people, would say good riddance.
“In 2016 we jumped into this debate because we believe that UBI folks were really short-sighted about what cash could do,” Shafeka Hashash, the director of cash initiatives at the Economic Security Project, told me. “We knew that cash wasn’t going to be the total fix to the social safety net, and so we reached back to civil rights champions who still named guaranteed income, but who also knew that these other market fixes needed to be happening too.”
Juliset, a single mother in New York City who participated in a two-year cash-transfer program when she was 25 and 26, said the aid made it possible for her to pay her energy bills, buy a crib and diapers, and get steady support for her daughter’s special needs.
“It’s not supposed to solve everything,” she told me. “I didn’t spend it on me, I didn’t spend it on going out, I used it for my bills and my kids. I had been really struggling and it got me through.”
