When given cash with no strings attached, low- and middle-income parents increased their spending on their children, according to Washington State University research. The study, published in the journal Social Forces, also found that the additional funding had little impact on child-related expenditures of high-income parents.
For the study, WSU sociologist Mariana Amorim analyzed spending by recipients of the Alaska Permanent Fund payments. Funded by state oil revenues, the fund is the closest program in the United States to a universal basic income. Every resident in Alaska receives a payment called a dividend; the total amount varies each year, but during the time span of this study, 1996-2015, payments averaged around $1,812 a person, or $7,248 for a four-person family, when adjusted for inflation to 2014 dollars.
“The data suggests that lower-income parents are responsible using cash payments, so we don’t need to be so afraid to give poor people money that can help their families,” Amorim said. “Low-income parents do need to spend a greater part of the money they received on basic necessities—for instance to catch up on bills or to fix a broken car—but they still managed with the leftover amount to invest in their children.”