Guaranteed Resources Optimize Wellbeing: Evaluating a Cash Transfer Program in Philadelphia

Cash transfer programs, also known as guaranteed or basic income programs, provide unrestricted cash payments to recipients, in contrast to public assistance programs like SNAP and Housing Choice Vouchers that cover specific expenses. The potential of cash transfer programs to improve the lives of recipients has garnered increasing attention from policymakers and researchers.

Reinvestment Fund joined with researchers David J. Pate, Jr., Deborah Blanks, and Susan Stanton to evaluate a cash transfer program pilot in Philadelphia: the Guaranteed Resources Optimize Wellbeing (GROW) study. We found that:

• Treatment participants experienced modest yet significant improvements in financial wellbeing, in social and psychological wellbeing, and food security.
• Qualitative analysis illuminated three key benefits of the GROW program: substantial investments in children, reduction in food insecurity, and an increased focus on personal and family wellbeing by parents.
• Reductions in financial stress created space for participants to focus on other aspects of their lives such as parenting, education (their children’s and their own), their jobs and careers, and their futures.
• Participants expressed increased feelings of confidence, self-efficacy, and optimism during the pilot period.
• Participants highlighted the reliability and flexibility of the payments, whether $500 or $50, as important sources of stability in their lives.
• Though observed improvements among Treatment group participants returned to baseline or slightly worse immediately after the monthly payments stopped at the end of the study (and economic shock effect), interviewees still expressed gratitude for the experience.

We conclude with these recommendations:

• Increase the monthly amount in cash transfer programs like TANF (which haven’t been adjusted since the 1990s) and tie payments to inflation to ensure benefits keep pace with the cost of living.
• Taper cash transfer payments over time to mitigate the benefits cliff/economic shock effect.
• Offer bridge funds for those transitioning out of the program due to employment or increases in income.
• Provide unrestricted cash supplements for TANF and E-TANF families during waits for mental health and other health services (up to six months).
• Expand access to mental health services to promote holistic wellbeing.