A UBI must be distributed to everyone within a region.

This question and many others are at the core of a debate that has gained remarkable interest and traction in the United States in the last year. The idea is bold, yet not new: a universal basic income (UBI) has floated in and out of political discourse for decades (Thigpen 2016). A UBI, also referred to as a guaranteed minimum income or income guarantee, is a cash transfer that everyone within a geographic/political territory receives on a regular basis with no conditions on a long-term basis.1 Such a guaranteed minimum income can also be implemented through a negative income tax (NIT) scheme, which ensures a minimum income through tax credits.

With its resurgence in the debate about economic security, many questions arise for those who consider the merits of guaranteed income: How does receiving cash directly (rather than conditional welfare, unemployment insurance, or food stamp benefits) affect recipients’ behavior and economic security? Will people who receive unconditional cash grants drop out of the workforce and do nothing? Will they waste their supplements on cigarettes and alcohol? In other words, would such a program be a waste of public investment? We can generate possible answers to these questions by looking to historical precedents, reviewing the behavioral and microeconomic effects of past and ongoing programs that deliver cash grants to individuals without conditions. By gaining a deeper understanding of the behavioral results of these real-world cash transfer experiments and programs, we can inform the ongoing debate about UBI.

The current discourse around UBI explores various program designs, from tax-and-transfer models to models that establish co-ownership of collective resources through dividend programs (see Thigpen 2016 for more detail on the intellectual history of these models). In general, what each of the proposed variations on UBI has in common are the following signature features:

• The program distributes cash directly to the recipient without a means test (i.e. it is not necessary to show that your income is below a certain threshold in order to qualify for the program) or set conditions for receiving the money.

• The funds are distributed over the long term.

• Everyone within a set geographic region receives the supplement.

To date, there has been no single government-funded cash transfer program in the United States that checks each of those boxes. However, taken holistically, there are several historical experiments and pilots we can review to understand the effects of a potential cash transfer program that unites all their key features. This paper will explore the labor supply, health, and education effects of those experiments and offer insight into what those results can teach us about creating unconditional cash transfer programs in developed countries, with a primary focus on the United States.