The COVID Cash Transfer Study: The Impacts of a One‐Time Unconditional Cash Transfer on the Well‐Being of Families Receiving SNAP in Twelve States

Abstract

There is growing interest in the use of unconditional cash transfers as a means to alleviate poverty, yet little is known about the effects of such transfers in the U.S. This paper reports on the results of a randomized controlled study of a one-time $1,000 unconditional cash transfer in May 2020 to families with low incomes in 12 U.S. states. The families were receiving, or had recently received, Supplemental Nutrition Assistance Program benefits. We examine the impact of the cash transfer on five pre-registered outcomes (material hardship, mental health, parenting, child behavior, partner relationships) and several secondary outcomes (hardship avoidance, consumption, employment, benefit use). We find no statistically significant effects (powered to detect effects of 0.09 standard deviations) of the cash transfer on any outcomes for the full sample. In pre-specified exploratory analyses, we find significant reductions in material hardship (-0.17 standard deviations) among families with less than $500 of earnings in the previous month, roughly the bottom 50 percent of monthly earnings for the study sample.

Unconditional cash transfers and mental health symptoms among parents with low incomes: Evidence from the 2021 child tax credit

“…Thus, the credit increased monthly income by nearly 60%, on average. Prior evidence on cash transfers has shown that effects are often larger for households that receive larger transfers relative to income (e.g., Evans et al, 2016 ; Pilkauskas et al, 2023 ).…”

“…Although we expect that, on average, the monthly credit improved the mental health symptoms of parents, some recent studies find null effects of the 2021 CTC on indicators of mental wellbeing ( Collyer et al, 2022 ; Glasner et al, 2022 ). Furthermore, other experimental studies of unconditional cash transfers have found null or negative mental health impacts ( Gennetian et al, 2022 ; Jacob et al, 2022 ; Jaroszewicz et al, 2022 ; Liebman et al, 2022 ; Magnuson et al, 2022 ; Pilkauskas et al, 2023 ). Jaroszewicz et al (2022) propose that receipt of insufficient cash support (some, but not enough) may increase the salience of unmet needs and therefore produce feelings of distress.…”

“…Several randomized evaluations of one-time unconditional cash transfers to low-income households have examined effects on mental health and found largely null results ( Jacob et al, 2022 ; Jaroszewicz et al, 2022 ), although one study found improvements in mental health among very low-income families ( Pilkauskas et al, 2023 ). Studies of recurring unconditional cash transfers to families with low incomes have similarly found little evidence of impacts on parental mental health ( Gennetian et al, 2022 ; Liebman et al, 2022 ; Magnuson et al, 2022 ).…”

“…This well-documented association suggests that cash transfer policies might have spillover effects on mental health outcomes. However, despite quasi-experimental evidence from low- and middle-income countries that cash transfers can improve the mental wellbeing of recipients ( McGuire et al, 2022 ), both quasi-experimental and experimental studies on cash transfers in the U.S. context have found more mixed evidence (e.g., Gennetian et al, 2022 ; Glasner et al, 2022 ; Pilkauskas et al, 2023 ).…”

Child Poverty and Health: The Role of Income Support Policies

“…An advantage of cash (over in-kind or a conditional transfer) is that families can use it in ways that are meaningful or needed by them-but this can make it challenging for researchers who study the effectiveness of cash. [85][86][87][88] Researchers need to consider new ways to measure outcomes, perhaps adaptively, where they evaluate different outcomes for different families, to focus on studying effects on outcomes that families say are important to improve after receiving cash transfers. 89 In the United States, work-contingent policies are very popular, as voters and politicians tend to identify the working poor as deserving of assistance.…”