Guaranteed income is a type of cash transfer program that provides continuous unconditional cash transfers to individuals or households. This differs from typical social safety net policies by providing a steady, predictable stream of cash to recipients to spend however they see fit without limitations.

Guaranteed income policies and their variants, including basic income, citizen dividends, partial basic income, and universal basic income, have minimal or no eligibility requirements. A guaranteed income may or may not meet basic needs.

Cash transfer programs are a broader category that includes guaranteed income programs. A cash transfer program is any program that offers direct cash assistance to an individual or household.

Cash transfers are called unconditional when receiving the cash doesn’t depend upon whether recipients perform any particular activities.

Cash transfers are called conditional when recipients must perform certain activities such as working or attending school, when the transfers are targeted at a particular group, or when the transfer is “means tested,” meaning that the assistance is reduced or stopped as the recipient earns more money.

Basic income is a type of cash transfer program that provides cash sufficient to meet basic needs of all individuals or households in a given area. The amount offered may be pegged to area median income or the local poverty rate. Variations on this policy include targeted basic income, which has a selection criteria, a partial basic income that provides cash transfers which are not sufficient to meet basic needs, and Universal Basic Income.

A universal basic income is a type of basic income that would be provided to everybody in a community, regardless of socioeconomic or employment status. UBI policies have very few or no eligibility restrictions (e.g., employment, household income, or other similar factors are not considered).

Guaranteed income provides direct cash assistance whereas U.S. social safety net policies such as EITC, Medicaid, and SNAP provide conditional, means-tested, and often in-kind benefits (like food or housing). Additionally, U.S. safety net programs typically target specific populations, and the benefits typically come with conditions such as employment, income or assets below a particular value, a criminal record free of convictions for drug-related offenses, or the presence of minors in the household. While these programs are valuable, they come with restricted use. For example, a housing voucher cannot pay for education or clothes.

Guaranteed income programs are implemented by governments. The impact on benefits therefore depends on who implements and funds the guaranteed income: federal, state, or municipal entities. Protecting people’s benefits is very important to the governments that the Jain Family Institute works with; in each of our exploratory demonstrations and pilots we have worked with federal, state and local government officials to protect recipients’ benefits during and after the pilots.

The idea that automation poses a unique threat to everyone’s employment is controversial and ultimately not necessary to make the case for a guaranteed income. It is true that some of the most vocal current advocates of a guaranteed income (for example, Elon Musk) argue that we need this policy because of the threat of automation. However, scholars, government officials, and community leaders have advocated for guaranteed income programs for decades and for many different reasons. Generally speaking, guaranteed income is something that could help people who would otherwise fall through the cracks during times of great transition, including automation, as well as trade and broader changes in the orientation of the economy.

Guaranteed income gives individuals and communities more choice. By providing unconditional cash support, a guaranteed income program can give each person the ability to make choices about how to best use the funds.

Guaranteed income can be a component of a rights-based rethinking of public policy, wherein members of a community receive an unconditional basic income as a human right. Ensuring a fixed standard of living as a basic right could empower people to invest in their present lives and their future.

A guaranteed income policy may also help us address some economic and social challenges we face in the 21st century. Income inequality is at its highest rate since 1928, right before the Great Depression. Growing rates of inequality are a symptom of structural changes in our labor markets: real wages have failed to rise with productivity and inflation since the mid-1970s.

The Great Recession demonstrated to many policy makers the dangers in having a social safety net so tied to work. The credit boom and seemingly strong economy of the 1990s and early 2000s masked the consequences of making welfare policies temporary and work-conditioned programs, and of shifting so much of our support for families into the earned income tax credit. The EITC was not available to the unemployed, and TANF (Temporary Assistance for Needy Families) with its attached work requirements and lifetime benefit limitations could not expand to counter the effects of the recession.

Guaranteed income can disincentivize recipients from working, and there may be important benefits to work beyond associated earnings: mental and physical health may be stronger among those who work, along with a sense of connection to a larger community.

A universal basic income would be extremely expensive ($3 trillion a year in the US, by one estimate) and that money might be better spent in other ways. A related critique focuses on the value of universal versus targeted transfers: is it better to give some money to many people or a larger amount to a smaller, needier group of people?

Some have argued that individuals may make poor choices (e.g., increase the use of alcohol and drugs) or use the money for unnecessary purposes. But see below–this argument has no grounding in research.

Research on the cost-effectiveness and “distributional” implications of guaranteed income programs is still in its infancy, but with our macroeconomic modelling work (see “inflation” below), JFI will provide answers to some of the questions that underlie this debate.

Yes, JFI is exploring this question through the use of macroeconomic models and simulations, and in our work on the large-scale policy implemented in Maricá, Brazil. This work is parallel to our pilot efforts and is informed, in part, by findings from them.

No. This is a common misconception. Numerous studies of cash transfer programs around the world have shown that recipients do not increase their use of alcohol or drugs. While some individuals do work less, the overall effect is modest. Those who do cut back on work also appear to devote more time to job training, education, or their kids.

Extensive social science research on cash transfer programs around the world shows that cash transfers increase human capital investment, food security, durable good consumption (buying a cow, a car, a refrigerator), and improvement of well-being.

Researchers survey recipients about how they’re using the money — and how the money affects their finances, decision-making, wellbeing, and more — throughout a pilot and afterwards. Social scientists have developed a variety of established surveying techniques to get accurate information from recipients. For some guaranteed income studies, researchers use administrative data, health records, and so on to see how recipients fare.

Yes, there are several pilots and policies currently running or in development.

Among pilots, the size of the transfers vary, but the amount is meant to make a substantive difference in citizens’ lives. In general, the amount depends on the cost of living in a region, the poverty line, and so on. Here are some examples of current pilots:

• Stockton, CA: Participants receive $500/month
• Magnolia Mothers: Participants receive $1000/month
• Y Combinator Research (research phase): Participants will receive $1000/month

Perhaps the most prominent example of a guaranteed income policy in the US is the Alaska Permanent Fund Dividend, which was implemented in 1976 and distributes public earnings from state oil revenue in the form of a yearly lump sum payment to all Alaska residents that have lived within the state for a full calendar year and intend to remain Alaska residents indefinitely. Residents receive $1500-$2500 per year. The Dividend has been and continues to be the subject of research that can provide insights into the effects of cash transfers more generally.

Some Native American tribes also distribute guaranteed incomes to their members. For example, The Eastern Band of Cherokee Indians have provided a guaranteed income to members since 1996, drawing from casino revenue.

All guaranteed income pilots currently underway in the U.S. have been privately funded with philanthropic dollars and/or institutional grants.

A universal guaranteed income policy at the municipal, state, or federal level can potentially be funded through a VAT tax, a carbon tax, a wealth tax, an increase in progressive income tax, a budget reallocation, or dividend from some kind of fund, like natural resources, casino revenue, some kind of sovereign or social wealth fund. This is an area of ongoing research.

JFI believes that guaranteed income programs are very promising. However, we believe that there is still a lot to learn about the individual, community, and large-scale effects of these policies and about how best to implement them at scale. While we know a fair amount about how a guaranteed income works, well-designed pilots can help us learn more about what an optimal or feasible guaranteed income policy would look like in different environments. JFI pilots serve these purposes by

• Allowing policymakers to incorporate evidence into their decision-making
• Building out disbursement systems that would be used in a full-scale policy
• Testing logistics and other tools critical to implementation
• Inviting citizens to have an impact on policies that will affect them
• Evaluating long-term effects on individuals and the broader economy

On the academic side, we can study important effects and research questions of a large regular cash transfer that have not been deeply studied. These include changes in time use, impacts on labor and leisure, time and investment in child-care and job trainings, changes in community engagement, and qualitative understandings of lived experience and well-being.

Although the conversation around UBI is having a recent revival, the concept is perennial, with early references to a guaranteed minimum income dating as far back as the sixteenth century. In Utopia, Thomas More proposed that providing “everyone with some means of livelihood” would be a more effective deterrence for theft than the death sentence. The sentiment that the state should guarantee citizens a secure subsistence has been echoed in the writings of Montesquieu, Thomas Paine, Charles Fourier, John Stuart Mill, Bertrand Russell, Milton Friedman, and Martin Luther King, among others, though the underlying motivations and details of the proposals vary widely. Whereas Paine argued for a basic income on the premise of common ownership of the earth, others focused on the decoupling of work and income, equality of opportunity, redistribution of wealth, freedom (from state paternalism), or simplification of the welfare state.

For more, please see this good overview from basicincome.org.

Not right now. We think that the range of policies that fall under the guaranteed income umbrella are promising, and should be tested and examined. Before we advocate a guaranteed income policy, we’d need to be confident that it helps people and is a better use of funds than other social policies.

We are researchers on one of the world’s largest guaranteed income policies, the Citizens’ Basic Income in Maricá, Brazil. JFI staff serve as advisors on SEED, the Stockton guaranteed income pilot, and as members of Newark, New Jersey’s Guaranteed Income Task Force. We are also advising on or developing several pilots at the state and municipal level or run by nonprofits; some in response to Covid-19 and some longer term, but these pilots aren’t public yet.

In addition to pilots, JFI is working on several other projects to advance the field. A forthcoming review article will examine the state of evidence in guaranteed income research: what is already known and what outcomes and outcome domains should researchers focus on? We are also supporting work to model the effects of guaranteed income policies at a metropolitan or national level (see “inflation” below) to understand how such policies would affect employment, GDP and housing markets and how these effects would vary according to financing approach (e.g., paid for through income taxes, sales taxes, carbon taxes, etc.). Finally, we will soon launch the Cash Transfer Research Platform, a web portal that will serve as a resource to researchers and policymakers interested in guaranteed income research. We plan to offer survey instruments, public use files, and “how to” documents describing some of the challenges faced when launching pilots.

The work we do on pilots and demonstrations is experimental and randomized, so no one can currently opt into a pilot. (Randomization is a key aspect of social science experimental research!) Studies are randomized to allow unbiased collection of data.

We are only aware of one recent guaranteed income demonstration that was “opt in,” which took place in Berlin, Germany.

Here are a few different ways you can get involved in a JFI pilot:

• If you’re interested in being a JFI researcher, contact us at jfi@jainfamilyinstitute.org.
• If you want to build a pilot, contact us at jfi@jainfamilyinstitute.org.
• If you have a press inquiry about JFI, contact the JFI communications team at communications@jainfamilyinstitute.org.