Randomly chosen low-income households in Compton, CA received unconditional cash transfers averaging roughly $500 monthly. Half received transfers twice monthly, half quarterly. Eighteen months later, twice-monthly transfers improved food security relative to quarterly transfers, but had no other differential effects on pre-specified main outcomes. Averaging across frequencies, monthly income (excluding transfers) was lower than controls by $333, and expenditures (excluding major durables) by $302, without changes in other primary outcomes, including overall labor supply. In line with this, we find suggestive evidence that households paid down debt and purchased durables. Transfers also affected part-time work, housing security, and violence.
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Just Give People Money. But How and When?
As America imagines a 21st-century safety net—and the roles of governments, businesses and communities—some of the solutions will involve just giving money. The right amount of money at the right time can make a big difference for people, especially for working families without much financial slack. That requires beginning with the idea that in fact it’s not just about money. How and when matter too.