How Do Low-Income Households Respond to Basic Income? Experimental Evidence from Minneapolis

Abstract

We study a randomized controlled trial that gave $500 per month for 24 months to 200 low-income people in Minneapolis, Minnesota. 329 people served as controls and received $150 for completing surveys every six months. These basic income payments equal one-third of annual income for the average participant. We pre-specified several methods to address large differential attrition rates and adjust statistical inference for multiple hypothesis testing. We find that basic income causes improvements in food security, housing stability, and financial security; has no effect on labor supply; and improves measures of mental health and self-reported well-being while participants are receiving payments.

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