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Here are the key points summarizing the impacts and outcomes of the basic income experiment on low-income households in Minneapolis:
1. Economic Stability Improvements
- Food Security: Basic income payments significantly increased food security, with treatment group members 15-20 percentage points more likely to be food secure compared to the control group.
- Housing Stability: There were moderate improvements in housing stability, particularly after 18 months, suggesting that participants used the extra income to manage rent and avoid forced moves.
- Financial Security: Basic income enhanced financial security by reducing dependence on external support (such as charities or family assistance) and increasing participants' ability to pay bills and manage unexpected expenses.
2. No Negative Impact on Employment
- The study found no evidence that receiving basic income reduced labor supply.
- Some estimates even suggested a slight increase in employment measures, contradicting common concerns that basic income discourages work.
3. Psychological and Subjective Well-being Improvements
- Mental Health Benefits: The treatment group showed significant improvements in mental health, as measured by the Kessler 10 (K10) scale, with distress levels dropping substantially.
- Subjective Well-being: Participants reported higher life satisfaction and happiness while receiving payments.
- Effects Were Temporary: Once the payments ended, well-being scores started declining, indicating that the benefits were linked directly to the availability of income support.
4. No Significant Savings Accumulation
- Participants primarily used the basic income for monthly necessities like rent, utilities, and food rather than saving.
- Paying off existing debt was also a frequent use of the funds, but there was little evidence of cash savings.
5. Comparisons with Other Basic Income Studies
- The study confirmed patterns seen in similar experiments: larger positive impacts in lower-income groups, especially in food security and mental health.
- Unlike some studies with higher-income participants, no reduction in labor supply was observed.
6. Policy Implications
- The results suggest that basic income can be an effective tool for reducing financial precarity without discouraging work.
- Temporary cash assistance can improve quality of life, but its benefits may fade after payments stop, raising questions about the long-term sustainability of basic income programs.
- The study challenges some traditional economic models, which predict stronger labor supply reductions and higher savings rates, indicating that low-income individuals prioritize immediate consumption over long-term financial planning.