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

Session Submission Type: Panel

Abstract

Income support programs in the United States vary enormously across states in their generosity, design, and reach. That variation shapes not just household finances but how families allocate time, respond to cash, and navigate vulnerable life transitions. Yet much of what we know about these behavioral consequences comes from single-program studies focused narrowly on labor market or consumption outcomes. This panel brings together four studies that examine diverse forms of cash and near-cash transfers across multiple contexts, drawing on administrative records, time-use surveys, card transaction data, and a randomized controlled trial to advance a more integrated understanding of how income support shapes household behavior and wellbeing.The first paper (Cowan) opens with a foundational behavioral question, testing the Permanent Income Hypothesis using Alaska's Permanent Fund Dividend, a near-universal annual cash transfer paid to all Alaskan residents on a single day each fall since 1982. Using anonymized Visa transaction indices spanning credit, debit, and prepaid cards, Cowan finds evidence against the PIH: Alaskans increase spending substantially in the week following payment, with excess sensitivity concentrated among lower- and middle-income consumers and driven primarily by debit cards. Liquidity constraints, rather than rational consumption smoothing, govern household responses even to fully anticipated transfers.The second paper (Ko) extends the behavioral question beyond spending to ask whether UI benefit duration shapes parental time investment during unemployment. Using ATUS-CPS data from 2003 to 2019 and within-state variation in maximum benefit weeks, the paper finds that more generous UI is associated with increases in enrichment-related and education-related caregiving, with effects concentrated among single parents who also reduce job search time under longer potential duration. Family structure emerges as a key dimension of heterogeneity in how households respond to income support.The third paper (Benatar, Lery, and colleagues) brings experimental evidence to bear, presenting midpoint results from California's randomized Guaranteed Income pilot for pregnant women and youth aging out of foster care. Nine-month findings show that unrestricted monthly payments of $600 to $1,200 reduced homelessness, financial stress, and perceived stress and improved mental health, with no effects on physical health or sleep. The paper contributes rare large-scale RCT evidence on guaranteed income during acute life transitions.The fourth paper (Danielson, Malagon, and Thorman) closes the panel by situating income support in an urgent policy context. Using linked administrative data from California's social services and employment agencies, the paper documents the labor market and program experiences of SNAP recipients experiencing homelessness, a population particularly exposed to HR1's 2025 elimination of the homelessness work-requirement exemption. The analysis provides actionable evidence for counties now implementing the new rules.Together, these papers trace a coherent arc from foundational theory to urgent policy application, offering concrete implications for program design across different transfer types, populations, and methods. At a moment when federal retrenchment is placing ever greater responsibility on states, the panel offers timely evidence on what income support generosity and structure actually deliver for economically vulnerable families.

Policy Area

• Poverty and Income Policy

Chair

• Anna Marion, University of North Carolina at Chapel Hill

Discussants

• Sara Kimberlin, Stanford Center on Poverty & Inequality

• Monica Saucedo, California Budget & Policy Center

Organizer

• Anna Ko, University of Wisconsin-Madison

Individual Presentations

• Universal, Unearned Income and Spending Behavior: Analyzing Consumer Response to Alaska's Annual Dividend Program - Presenting Author: Sarah K Cowan, New York University

• UI Duration and Parental Investment During Unemployment - Presenting Author: Anna Ko, University of Wisconsin-Madison

• Midpoint Impacts of California’s Guaranteed Income for Pregnant Women and Youth Aging Out of Foster Care - Presenting Author: Sarah Benatar, Urban Institute

• Labor market experiences of SNAP recipients who experience homelessness: evidence from California - Presenting Author: Caroline Danielson, Public Policy Institute of California