Guaranteed income programs, often promoted as a way to fight poverty, show mixed results when it comes to improving health. This is the main takeaway from a study by the University of Michigan and other institutions. The study, known as the Unconditional Income Study from OpenResearch, provided valuable insights into the impact of cash transfers.

In the study, 1,000 adults received $1,000 each month for three years. The researchers wanted to see how this money would affect their health, jobs, and spending habits. Surprisingly, the money only brought short-term benefits for stress and mental health. It didn’t make a noticeable difference in physical health, according to what the participants reported.

Lack of stress relief

The researchers were disappointed by the lack of long-term stress relief, as this was hoped to be a key way extra income could improve health. “There’s a lot of focus in health policy now on tackling ‘social determinants of health’, like poverty,” they said. “But based on these results, it’s hard to say that cash payments alone can solve these issues.”

However, the study did find that people who received the money went to the doctor and dentist more often. This could mean better health in the future, even if it wasn’t visible during the study.

Participants were chosen from diverse counties in Texas and Illinois. Initially, they were promised at least $50 per month to join the study. From the 14,000 who agreed, a diverse sample of 3,000 was selected, with 1,000 receiving the $1,000 payments. The control group continued to receive the smaller amount to keep them involved in the study.

Working less

The $1,000-a-month recipients worked about 1.4 hours less per week on average. The researchers didn’t see this as a bad thing; people valued having more time, which they thought was a good use of the money.

Spending also went up, especially on food, leisure, transportation, and housing—by about $300 more each month. While this didn’t directly improve health, it gave people more financial freedom, which is a key benefit of cash transfers.

“If the goal is to improve health specifically, there are better ways to do it, like making healthcare cheaper and easier to access,” the researchers concluded.

This study highlights the need to understand what cash transfers can and can’t do. While they are helpful in reducing poverty, they might not be the best tool for improving health. This knowledge is essential for making good policy decisions.