$750 a month was given to homeless people in California. What they reported spending it on is more evidence that universal basic income works.
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- What happens when homeless people are given $750 a month for a year?
- Participants in a study reported being more likely to find shelter and closer to meeting basic needs.
- Results from the study's first six months appear to show the effectiveness of a basic-income plan.
About 100 homeless people in California's Los Angeles County and San Francisco Bay Area were given $750 a month for a year — no questions asked.
The newly released results of the first six months of the study on the impact of basic income and social support intervention show how the recipients spent the influx of cash.
The findings appear to be the latest piece of evidence showing the benefits of a basic-income plan.
The study found that after six months, those who received the $750 monthly stipend were less likely to report being unsheltered and said they were closer to having enough money to meet all of their basic needs compared with a control group of people who accessed usual homeless services.
The study, conducted by the San Francisco nonprofit Miracle Messages and the University of Southern California Suzanne Dworak-Peck School of Social Work, also found that those receiving the $750 stipend reported spending the highest share, 36.6%, on food in the first six months.
Participants on average reported spending nearly 20% on housing, 12.7% on transportation, 11.5% on clothing, 6.2% on healthcare, and 13.6% on other expenses that were not classified, the study found.
Ben Henwood, who led the study, told the Los Angeles Times that "it dispels this myth that people will use money for illicit purposes."
He told the Times only about 2% of the $750 a month was spent on alcohol, cigarettes, or drugs, the majority of that on cigarettes.
"People have different needs, and we're empowering them to focus on what is going to help them individually," Henwood, the director of the Center for Homelessness, Housing and Health Equity Research at the USC Suzanne Dworak-Peck School of Social Work, said in a statement.
The study included a quote from one recipient of the money who said they used the cash to "catch up on bills" and for a much-needed car repair, while another told the researchers they spent "a lot of the money on food on the go."
For those who received the funds, the proportion of people who reported being unsheltered in the past month dropped from 30% at the start of the trial to under 12% at the six-month follow-up, the study found.
The number of those in the control group who reported being unsheltered decreased slightly to 23% from 28%.
Researchers behind the study plan to publish a follow-up report based on the full year of data.
Other basic-income experiments have found similar positive results
The news out of California is the latest in a series of basic-income experiments that appear to show the benefits of just giving money directly to people in need.
Durham, North Carolina, experimented with guaranteed income, giving formerly incarcerated residents a stipend each month.
Employment and housing rates rose for recipients, and during the yearlong project, no one reoffended.
Pilot programs in Denver and Stockton, California, produced similar results. The researchers found that people who were given monthly stipends were more likely to report finding full-time jobs and housing by the end of the experiments.
Correction: December 20, 2023 — An earlier version of this story incorrectly described the initial results of the study in Los Angeles County and San Francisco Bay Area. The participants self-reported how they spent the money.