Study: Employment rose among those in free money experiment

SACRAMENTO, Calif. (AP) — After getting $500 per month for two years without rules on how to spend it, 125 people in California paid off debt, got full-time jobs and had “statistically significant improvements" in emotional health, according to a study released Wednesday.

The program was the nation's highest-profile experiment in decades of universal basic income, an idea that was revived as a major part of Andrew Yang's 2020 campaign for president.

The idea is to bring people out of poverty with a guaranteed monthly income. Supporters say it gives people needed financial security to find good jobs and avoid debt. But critics have argued free money would eliminate the incentive to work, creating a society dependent on the state.

The Stockton Economic Empowerment Demonstration sought to test those claims. Run by a nonprofit founded by former Stockton Mayor Michael Tubbs, the program included people who lived in census tracts at or below the city's median household income of $46,033.

The program did not use tax dollars, but was financed by private donations, including a nonprofit led by Facebook co-founder Chris Hughes.

A pair of independent researchers at the University of Tennessee and the University of Pennsylvania reviewed data from the first year of the study, which did not overlap with the pandemic. A second study looking at year two is scheduled to be released next year.

When the program started in February 2019, 28% of the people slated to get the free money had full-time jobs. One year later, 40% of those people had full-time jobs. A control group of people who did not get the money saw a 5 percentage point increase in full-time employment over that same time period, from 32% to 37%.

“These numbers were incredible. I hardly believed them myself," said...