Household Response to a Guaranteed Income Policy: Evidence from a Randomized Experiment in Compton, California

In Compton, California, low-income individuals face high rates of food insecurity, difficulty making timely rent and bill payments, and a poverty rate and unemployment rate over 20 percent. In our project, we plan to test whether and how guaranteed income for low income individuals affects participants’ lives. In January 2021, the City of Compton, in collaboration with the Fund for Guaranteed Income (F4GI), began disbursing unconditional cash transfers to 698 low-income households for a period of 24 months, with an additional 1,402 households serving as the control group. Among the treatment group, the timing of transfers is randomized such that half of recipient households receive transfers twice each month, while the other half receive transfers once per quarter. The main research questions involve whether the transfers alleviate financial distress, affect labor outcomes, and lead to changes in economic, social, physical, and mental conditions within the two-year study time frame. The project will also test for differential effects of transfers delivered at high and low frequencies.