Would it surprise you to know that if you give people free money, they’ll earn less? The National Bureau of Economic Research ran a three-year study that gave poor people a bag of cash every month to see how it would affect their behavior. Guess what happened.
We study the causal impacts of income on a rich array of employment outcomes, leveraging an
experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per
month unconditionally for three years, with a control group of 2,000 participants receiving $50/
month.We gather detailed survey data, administrative records, and data from a custom mobile
phone app. The transfer caused total individual income to fall by about $1,500/year relative to the
control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount.The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements.
We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
I’m not sure how lowering annual income benefits The Community unless that is the goal. It is hardly flattering for socialism, which we know decreases productivity—and again, maybe that is the point. The Climate Cult was never so happy as when the world was looked down. So, to borrow from Jeff Childers,
Never give up, hopeful socialists insist. Try, try again! Nevermind Albert Einstein’s definition of insanity (trying, trying again but expecting a different result). Nevermind Benjamin Franklin (“when people find they can vote themselves money it will be the end of the Republic”). And nevermind the foundational wisdom literature underpinning Western Civilization (“The one who is unwilling to work shall not eat.” 2 Thess. 3:10).
Those quaint, old-fashioned ideas are patriarchical, non-inclusive, and most importantly, inequitable.
And then there’s the national debt.
