The challenge
Many low-income residents faced unstable incomes and couldn't cover basic costs.
The case
The Stockton Economic Empowerment Demonstration, launched in 2019 under Mayor Michael Tubbs and funded by philanthropy, gave 125 randomly selected residents of low-income neighborhoods $500 a month for two years. Researchers compared them with a control group. Recipients were more likely to find full-time work than the control group, and they reported less anxiety and depression and more stable finances. Most of the money was spent on food, utilities and other basics. Full-time employment among recipients rose from 28% in February 2019 to 40% a year later, while the control group rose from 32% to 37%.
Why it worked
It challenged the assumption that cash without conditions discourages work, and it sparked more than a hundred similar US pilots. The sample was small and the pandemic hit mid-study, so the findings need confirming at scale.
Sources
- West, S., Castro Baker, A., et al. (2021). Preliminary analysis: SEED's first year. Stockton Economic Empowerment Demonstration.
- West, S., Castro Baker, A., et al. (2021). Preliminary analysis: SEED's first year. Stockton Economic Empowerment Demonstration.
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