By: The Editorial Board – wsj.com – August 8, 2025

A test of free $1,000 grants showed few social or natalist benefits.

OpenResearch says the study showed that “parents improved their parenting practices and made meaningful investments in their children and themselves.” But drill down, and the findings are uninspiring.

Those who received the $1,000 payments did report better parenting behavior in surveys, though they may have been more inclined to say this because they were receiving free money. They also spent more money on their children. On the other hand, they reported that their children experienced more developmental difficulties and stress than the control group. The authors suggest that parents receiving cash might simply have been more attentive to their children’ problems than those in the control group.

Notably, while the transfer payments reduced parents’ self-reported stress levels during the first year of the study, the “effects were short-lived and dissipated by the second year,” the researchers write.

The handouts also “did not have a meaningful effect on most educational outcomes measured in school administrative records,” including attendance, disciplinary actions or repeating a grade. Illinois children whose parents received free cash had worse grades, though this negative effect was not statistically significant after researchers adjusted for other variables.

The payments also did not “affect characteristics of the home environment, child food security, exposure to homelessness, or parental satisfaction.” Nor did they increase the probability of parents having another child, which corroborates other studies that have found cash payments don’t increase fertility rates. Sorry, Mr. Vice President.

The researchers reported last year that the cash transfers increased healthcare utilization, including hospital and emergency care, but this produced no measurable effects on physical health outcomes. A study of Oregon’s Medicaid expansion in 2008 came to a similar conclusion.

Recipients also worked less, equivalent to roughly eight fewer days in the previous year. Yet OpenResearch touts that “average household income was roughly $6,100 higher for recipients than control participants, including the transfer amount” and payments “increased agency to work fewer hours or reduce the number of jobs held.” In other words, the payments led people to work less.

The results mesh with other evidence that a guaranteed annual income isn’t the path to upward mobility. It might even make that mobility less likely. Increasing the incentives to work and become less dependent on government is a better way to help the poor rise.

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Source: A Guaranteed Annual Income Flop – WSJ