How Temporary Cash Transfers Affect Household Finances

Priti Kalsi (), David Phillips (), Ryan Swanson () and Patrick Turner ()
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Priti Kalsi: Rochester Institute of Technology
David Phillips: University of Notre Dame
Ryan Swanson: University of Notre Dame
Patrick Turner: University of Notre Dame

No 19088, IZA Discussion Papers from IZA Network @ LISER

Abstract: We evaluate a guaranteed basic income experiment providing twelve monthly $500 transfers to very low-income US households. During the final month of payments, a survey index of financial distress declined by 0.18 SD, and an overall well-being index increased by 0.15 SD. By contrast, collections balances from credit reports show no change during transfers and likely increase for some recipients in the year after transfers end. These results appear to be driven by changes in financial decision-making including shifts away from informal borrowing and toward future returns.

Keywords: guaranteed basic income; unconditional cash transfers; household finance; informal borrowing; financial distress; credit outcomes; scarcity (search for similar items in EconPapers)
JEL-codes: G51 H75 I38 (search for similar items in EconPapers)
Date: 2026-11
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