Cash Can Make Its Absence Felt: Randomizing Unconditional Cash Transfer Amounts in the US

112 Pages Posted: 18 Jul 2022 Last revised: 19 Dec 2023

See all articles by Ania Jaroszewicz

Ania Jaroszewicz

Harvard University - Institute for Quantitative Social Sciences; University of California, San Diego (UCSD) - Rady School of Management

Jon Jachimowicz

Harvard University - Organizational Behavior Unit

Oliver Hauser

University of Exeter Business School - Department of Economics

Julian Jamison

University of Exeter

Date Written: July 5, 2022

Abstract

We randomized 5,243 Americans in poverty to receive $500, $2,000, or nothing, then measured
their financial well-being, psychological well-being, cognitive capacity, and health through surveys
administered one, six, and fifteen weeks later. While bank data show that the cash increased
households' spending, we find no evidence that (more) cash improved survey outcomes: estimates
are overwhelmingly negative or indistinguishable from zero, in contrast to experts' and laypeople's
predictions. Our data suggest that the windfall made participants' (unmet) needs more salient,
which caused distress. We rationalize these findings through a model that illustrates how receiving
cash can also highlight its absence.

Keywords: Cash Transfers, Poverty, Welfare, Behavioral, Household Finance, Field Experiments

JEL Classification: C93, D91, G50, I30

Suggested Citation

Jaroszewicz, Ania and Jachimowicz, Jon and Hauser, Oliver and Jamison, Julian, Cash Can Make Its Absence Felt: Randomizing Unconditional Cash Transfer Amounts in the US (July 5, 2022). Available at SSRN: https://ssrn.com/abstract=4154000 or http://dx.doi.org/10.2139/ssrn.4154000

Ania Jaroszewicz (Contact Author)

Harvard University - Institute for Quantitative Social Sciences ( email )

1737 Cambridge St.
Cambridge, MA 02138
United States

University of California, San Diego (UCSD) - Rady School of Management

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Jon Jachimowicz

Harvard University - Organizational Behavior Unit ( email )

Soldiers Field
Boston, MA 02163
United States

Oliver Hauser

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom

HOME PAGE: http://www.oliverhauser.org

Julian Jamison

University of Exeter ( email )

Northcote House
The Queen's Drive
Exeter, EX4 4QJ
United Kingdom

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