by Charlotte Hazard
The left-leaning National Bureau of Economic Research conducted a guaranteed income study that showed when people work less, they still have less money.
The study was titled “The Employment Effects of a Guaranteed Income: Experimental Evidence from Two U.S. States” and came out last month.
This study comes out as Democratic presidential nominee Kamala Harris campaigns on a $25,000 subsidy for eligible homebuyers to support down payments.
The NBER conducted a study with 1,000 low income individuals and gave them each $1,000 per month for three years. There was also a control group of 2,000 participants that got only $50 a month.
The money was distributed by two nonprofit groups and is described as the largest “unconditional cash transfer program” that was evaluated by a randomized controlled trial.
“We gather detailed survey data, administrative records, and data from a custom mobile phone app,” the study reads. “The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers.”
Results found that there was a 2 percent decrease in the labor market participation and a decrease by 1.3-1.4 hours in working hours. In addition, partners of the participants in the study also voluntarily reduced their work hours.
“The estimates of the effects of cash on income and labor hours represent an approximately 4-5 percent decline relative to the control group mean,” the study says.
Another aspect that the study discovered was that throughout this process, one of the largest things people spent time on was leisure and there were smaller increases that occurred in activities such as transportation.
“The time diaries and survey questions support the findings for employment,” the study said. “Treated participants primarily use the time gained through working less to increase leisure, also increasing time spent on driving or other transportation and finances, though the effects are modest in magnitude.”
Universal basic income has been an idea that has been floated before and covered by outlets such as The Washington Post and The 19th News both of whom have advocated for it.
States such as Iowa, South Dakota and Arkansas have laws that don’t allow localities to implement guaranteed income programs.
The study conducted by NBER showed there were clear labor supply reductions as a result of money being given consistently.
“But, even labor supply reductions due to such income effects could increase the fiscal costs of public programs, and they could also harm participants’ long-term labor market prospects, especially to the extent that beneficiaries are not sufficiently forward-looking,” the study reads.
Interestingly, Vice President Harris unveiled another proposal last week promising a $6,000 credit for families with newborns, following a month after a suggestion earlier this month from Sen. JD Vance, R-Ohio, the GOP that the credit be raised from $2,000 per child to $5,000. This comes on the heels of Harris parroting Donald Trump’s proposal to lift taxes on workers’ tips.
The concept predates both of their rises to presidential aspirations, after Republican Rep. Ron Paul in 2007 introduced legislation in the House to exempt tips from both federal income and payroll taxes, which didn’t end up going anywhere, according to USAToday.
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Charlotte Hazard is a reporter for Just the News.
Photo “Welder” by Pavel Chernonogov.
