Speaker: Oliver Hauser (U Exeter)

Title: How Effective Is (More) Money? Randomizing Unconditional Cash Transfer Amounts in the US (with A. Jaroszewicz, J. Jachimowicz and J. Jamison)

When: Monday, 31 March 2025, 11:30 am – 13:00 pm

Where: Oskar-Morgenstern-Platz, lecture hall 5 (ground floor) (map)

Abstract:

We randomized 5,243 Americans in poverty to receive a one-time unconditional cash transfer (UCT) of $2,000 (two months' worth of total household income for the median participant), $500 (half a month's income), or nothing. We measured the effects of the UCTs on participants'  nancial well-being, psychological well-being, cognitive capacity, and physical health through surveys administered one week, six weeks, and 15 weeks later. While bank data show that both UCTs increased expenditures, we find no evidence that (more) cash had positive impacts on our pre-specified survey outcomes, neither between the control and cash groups, nor between the two cash groups. These results stand in stark contrast to experts' and laypeople's incentivized predictions. We test several explanations for these unexpected results. The data are most consistent with the notion that receiving some but not enough money made participants' (unmet) needs more salient, which caused distress. We develop a model to illustrate how receiving cash can sometimes also highlight its absence.

The paper can be found here.