A recent study tested the effects of guaranteed income—regular, no-strings-attached cash payments—on low-income households in Compton, California. The trial looked at a range of outcomes, including work, income, spending, debt, and mental health.

Launched in December 2020 by Compton’s former mayor Aja Brown and the Fund for Guaranteed Income (F4GI), the Compton Pledge gave 695 randomly selected households about $500 per month for two years. Another 1,402 households served as a control group and did not receive payments. The trial also explored whether payment frequency mattered, comparing recipients paid twice a month to those paid once a quarter.

By April 2023, researchers surveyed 1,074 households to measure the program’s effects. Key findings include:

• No major impact on full-time workers: Cash payments did not affect full-time employment but lowered labor force participation among those working less than 20 hours a week.
• Modest income changes: Recipients reported slightly higher incomes when the transfers were included, but earned less income outside the program compared to the control group.
• Lower spending: Recipient households spent $302 less per month than the control group, contrary to expectations.
• Debt reduction: Recipients reduced non-housing debt by $2,190 on average, though the change was not statistically significant. Households receiving bi-monthly payments saw significant drops in credit card debt, unlike those paid quarterly.
• Housing security gains: Fear of eviction fell, but there was no broad improvement in financial or psychological well-being.
• Gender differences: Women, especially single mothers, benefited more than men. Female recipients reported better financial security and smaller declines in earned income and assets, while single mothers saw income rise without reducing work hours. Male recipients, however, reported feeling less financially secure.

The study’s finding that cash transfers led to reduced spending is surprising, given global evidence showing the opposite. Unlike other studies in the US and Canada, which linked guaranteed income to higher spending and health or education gains, Compton’s program showed less debt alongside reduced expenditures. This unexpected pattern adds a nuanced perspective to the debate on guaranteed income’s effects.