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Cited by 14Financial Literacy, Pension, Retirement AnalysisPoverty, Education, and Child WelfareIncome, Poverty, and Inequality

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The Impact of Unconditional Cash Transfers on Consumption and Household Balance Sheets: Experimental Evidence from Two US States

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Bartik, Alexander, Rhodes, Elizabeth, Broockman, David, Krause, Patrick, Miller, Sarah, Vivalt, Eva·2024·National Bureau of Economic Research
DOI 10.3386/w32784
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Abstract

We provide new evidence on the causal effect of unearned income on consumption, balance sheets, and financial outcomes by exploiting an experiment that randomly assigned 1000 individ-uals to receive $1000 per month and 2000 individuals to receive $50 per month for three years. The transfer increased measured household expenditures by at least $300 per month. The spending im-pact is positive in most categories, and is largest for housing, food, and car expenses. The treatment increases housing unit and neighborhood mobility. We find noisily estimated modest positive ef-fects on asset values, driven by financial assets, but these gains are offset by higher debt, resulting in a near-zero effect on net worth. The transfer increased self-reported financial health and credit scores but did not affect credit limits, delinquencies, utilization, bankruptcies, or foreclosures. Ad-justing for underreporting, we estimate marginal propensities to spend on non-durables between 0.38 and 0.50, on durables and semi-durables between 0.18 and 0.24, and marginal propensities to de-lever of near zero. These results suggest that large temporary transfers increase short-term con-sumption and improve financial health but may not cause persistent improvements in the financial position of young, low-income households.

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  • The simulated UBI effects of increased consumption and reduced depression are similar to the impact observed in Texas' UBI policy, validating the realism of the simulation.

    “which is similar to the impact observed in Texas' UBI policy [14], thus validating the realism of the simulation.”

    From AgentSociety: Large-Scale Simulation of LLM-Driven Generative Agents Advances Understanding of Human Behaviors and Society (2025) · cites this paper as [14]

    The Abstract reports that the cash-transfer experiment increased household expenditures, supporting the consumption part of the comparison. Section 2 describes a study conducted in Illinois and Texas, not a Texas UBI policy. The paper’s financial-health discussion (Section 5.2) does not report reduced depression; its findings therefore cannot establish that the simulation matches such an effect. (LLM, conf=0.88)

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Research works printed but not linked: 34

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Metadata

Authors
Bartik, A., Rhodes, E., Broockman, D., Krause, P., Miller, S., & Vivalt, E.
Affiliations
  • University of Illinois Urbana-Champaign (US)
  • OpenResearch (United States) (US)
  • University of California, Berkeley (US)
  • University of Michigan (US)
  • University of Toronto (CA)
Corresponding author
Bartik, Alexander
ORCID
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2024-08
DOI
10.3386/w32784
OpenAlex
W4401321075
Cited by
13
References
0
Citations by year
2026: 8 · 2025: 4 · 2024: 1
Type
report
Language
en
Open access
Locations
  • National Bureau of Economic Research (publishedVersion)
  • SSRN Electronic Journal (acceptedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
University of Illinois at Urbana-Champaign
Topics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Literacy, Pension, Retirement Analysis
  • Social Sciences › Development › Poverty, Education, and Child Welfare
  • Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
Keywords
unconditional cash transfers, unearned income, household consumption, household balance sheets, net worth, residential mobility, neighborhood mobility, financial well-being, credit scores, household debt, asset value, marginal propensity to consume, low-income households, temporary transfers

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