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Michael Hiltzik: Stockton study shows that universal basic income can be life-changing

Michael Hiltzik, Los Angeles Times on

Published in Business News

The concept of universal basic income, which has received a boost from economic conditions during the pandemic, has just received another favorable vote.

This one comes from a study of a two-year guaranteed income project in Stockton, Calif., which delivered monthly no-strings-attached checks of $500 to 125 mostly low-income residents.

A preliminary analysis of the first year of the program, through February 2020, found that recipients were "healthier, showing less depression and anxiety and enhanced well-being" than those in a control group not receiving the stipends.

They also experienced less month-to-month fluctuations in household income. Most notably, they had greater success finding full-time work or upgrading their employment. That turns on its head the conventional conservative argument that such programs will disincentivize the search for work and turn recipients into layabouts.

At the start of the study period in February 2019, according to the analysis, 28% of recipients had full-time employment; a year later, 40% did. By comparison, full-time employment in the control group rose only from 32% at the start to 37% after a year.

In other words, recipients were able to move into full-time work at about twice the rate of the control group.

 

"What we saw was that individuals were able to leverage the $500 in ways that enabled them to show up and fill out a job application — if you're working part time and taking care of a child, there's not a lot of time in your day," says Stacia West, an expert in social work at the University of Tennessee. "Financial scarcity creates time scarcity."

West says she was surprised at that finding, more so than others who helped create the program with more experience in the target community. "They were not shocked at all," West told me. "They understood that when you're financially constrained, you just don't have the bandwidth to think about the future."

West conducted the analysis with Amy Castro Baker of the School of Social Policy and Practice at the University of Pennsylvania. They're working on a second-year analysis, due in September, that will bring their study to the end of the program, which is formally known as the Stockton Economic Empowerment Demonstration, or SEED. The final checks went out to recipients in January.

West and Baker helped design the Stockton program. But their findings do conform to those of analyses of other guaranteed-income programs.

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