The Long-Term Effects of Cash Assistance

Abstract

We investigate the long-term effects of cash assistance for beneficiaries and their children by following up with participants in the Seattle-Denver Income Maintenance Experiment. Treated families in this randomized experiment received thousands of dollars annually in extra government benefits for three or five years in the 1970s. We match experimental records to Social Security Administration data using a novel algorithm and find that treatment decreased adults’ post-experimental annual earnings by $1,800 and increased disability benefit applications by 6.3 percentage points, possibly driven by occupational changes. In contrast, children in treated families experienced no significant effects on any main variable studied.