Midpoint Impacts of California’s Guaranteed Income for Pregnant Women and Youth Aging Out of Foster Care

• In Event: Cash Transfers, Income Support, and Household Behavior: Evidence from Multiple Contexts

Abstract

Background and Purpose: In 2023, the California Department of Social Services (CDSS) began administering a guaranteed income (GI) pilot program in seven sites across the state for two groups experiencing vulnerable life transitions: low-income pregnant women and youth aging out of foster care (former foster youth). The CDSS GI pilots provide unrestricted monthly cash payments of $600-$1,200 for 12 or 18 months.Unconditional cash payment programs are being delivered worldwide under the theory that financial strain is a primary barrier to well-being and cash is a straightforward, administratively simple solution. One approach to cash payments, GI, is intended to support low-income populations by providing a time-limited benefit designed to stabilize financial precarity. The CDSS program is unique because it offers both GI and waivers that exclude the payments from counting as income--protecting means-tested benefits, something that has not been part of similar domestic GI programs. Furthermore, the income test and cash payments varied by site according to local cost of living differences across the large and diverse state. This paper examines whether state-funded GI improved outcomes including housing, financial wellbeing, mental health, and stress among others after nine months of receipt.Methods: We employed a randomized controlled trial design enrolling 2,284 pregnant participants and 776 former foster youth. Data sources include longitudinal surveys using validated scales administered at baseline, three and nine months post-randomization, program exit, and six months post-exit. This paper reports average treatment effects at the midpoint (nine-month) mark following an earlier analysis of impacts at three months. Differences between groups were tested using unadjusted chi-squared and t-tests.Results: Treatment and control groups were equivalent at baseline, with response rates of 77% and 66% for pregnant participants and former foster youth, respectively. At nine months, we observe ongoing protective impacts of GI, with response rates of 65% and 49%. For pregnant participants, the treatment group was less likely to have experienced homelessness/couch surfing (11% vs. 17% in the past year, p<0.001), less likely to report financial stress (37% vs. 53% in the past three months, p<0.001), experiencing fewer days of poor mental health in the past month (9 vs. 10.3, p<0.05), and reporting lower perceived stress (p<0.001) compared to the control group. For former foster youth, the treatment group was also less likely to report experiencing homelessness/couch surfing (44% vs. 48%, p<0.05), less likely to report financial stress (57% vs. 77%, p<0.001), experienced fewer days of poor mental health in the past month (12 vs. 16, p<0.01), and had lower perceived stress (p<0.01) compared to the control group. We observe no effects on physical health or activity, sleep or sleep quality, or diet for either population.Conclusions and Implications: Pregnant women and former foster youth both face life transitions that put them at risk for homelessness and increased stress. Midpoint results suggest that GI can improve some aspects of wellbeing for both populations. Future survey waves will determine if results continue to sustain.

Author

• Sarah Benatar, Urban Institute
  Presenting Author