Long-Term Effects of Income Supplements for Children

Excellent piece in the Times by Moises Velasquez-Manoff about a natural experiment on the effect of income supplements on the long-term mental health of Native Americans who received dividends from casino profits in North Carolina. Unsurprisingly, mental health outcomes were better for children whose families had received the dividends than for the control group of white children in the same area whose families were not entitled to tribal dividends.

The investigators, led by Jane Costello of the Duke University Medical School, had been following the children (both Native American and white) before the Eastern Band of Cherokee Indians began distributing dividends. This means they had an existing control group and had data on the control and experimental groups before and after the dividends were implemented.

Their first report was published in 2003. Their second report, published in 2010, followed the children into adulthood.

Alaska has a similar (though smaller) resource dividend from the sovereign wealth fund it established with oil royalties, but since the dividend goes to all state residents, there is no control group to measure the dividend’s effects against.

Costello’s findings provide support for the idea that an unconditional basic income, while expensive to implement, actually saves money in the long run by cutting social costs related to mental illness and substance abuse. They also provide support for including children in basic income schemes in countries like the U.S. that lack child allowances because, as I argued in Basic Income Studies, a basic income that goes only to adults is less efficient in targeting child poverty in single-parent families.