Basic Income and the Dynamics of Employment and Human Capital in a Non-Urban Disadvantaged Setting

Abstract

Why and when could basic income inhibit employment?We randomize 200 dollars of basic income per month for two years within a non-urban disadvantaged sample tracked using high-frequency administrative data.The amount provided is 21% of average all-source income.In the short term (0.5 years after baseline), relative to the control group, treatment-group employment decreases by 58%, average all-source income remains constant, and health-investment rates increase.In the longer term (1.25 years after baseline), employment and health-investment rates revert to their control-group counterparts.Treatment participants receive basic income, take time off work, address health needs, and, subsequently, reintegrate into employment.