How effective is (more) money? Randomizing unconditional cash transfer amounts in the US

Ania Jaroszewicz (University of California San Diego), Oliver P. Hauser (University of Exeter), Jon M. Jachimowicz (Harvard Business School) and Julian Jamison (University of Oxford and University of Exeter)

GPI Working Paper No. 28-2024

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’ financial 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, in 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. (JEL: C93, D91, I30)

Other working papers

On two arguments for Fanaticism – Jeffrey Sanford Russell (University of Southern California)

Should we make significant sacrifices to ever-so-slightly lower the chance of extremely bad outcomes, or to ever-so-slightly raise the chance of extremely good outcomes? Fanaticism says yes: for every bad outcome, there is a tiny chance of of extreme disaster that is even worse, and for every good outcome, there is a tiny chance of an enormous good that is even better.

Minimal and Expansive Longtermism – Hilary Greaves (University of Oxford) and Christian Tarsney (Population Wellbeing Initiative, University of Texas at Austin)

The standard case for longtermism focuses on a small set of risks to the far future, and argues that in a small set of choice situations, the present marginal value of mitigating those risks is very great. But many longtermists are attracted to, and many critics of longtermism worried by, a farther-reaching form of longtermism. According to this farther-reaching form, there are many ways of improving the far future, which determine the value of our options in all or nearly all choice situations…

‘The only ethical argument for positive 𝛿’? – Andreas Mogensen (Global Priorities Institute, Oxford University)

I consider whether a positive rate of pure intergenerational time preference is justifiable in terms of agent-relative moral reasons relating to partiality between generations, an idea I call ​discounting for kinship​. I respond to Parfit’s objections to discounting for kinship, but then highlight a number of apparent limitations of this…