In the 90s, the United States implemented some of the most far-reaching changes to welfare in modern American history. Bill Clinton worked with Republicans to “end welfare as we know it” and eliminate welfare’s supposed corrupting influence on the poor. Except the “corrupting influence” of government assistance never existed.
A recent article by the New York Times pointed out that recent research contradicts the theory that a social safety net undermines positive behavior among the poor.
The Massachusetts Institute of Technology found that cash-assistance programs in six low-income countries did not discourage work. Furthermore, a World Bank review of 19 quantitative studies found that cash-assistance in Latin America, Asia and Africa was not wasted on “temptation items,” such as tobacco and alcohol.
“Almost without exception, studies find either no significant impact or a significant negative impact of transfers on temptation goods,” the World Bank report said.
This trove of research demonstrates that the commonly accepted myth about welfare’s “corrupting influence” is not as well-founded as many may believe. However, research has shown clear benefits from the UBI system, including alleviating poverty, increasing entrepreneurship and improving impoverished children’s educational outcomes.
In theory, unconditional assistance may encourage some individuals to frivolously spend their money. In practice, however, the research shows most individuals utilize cash-assistance to better themselves and their families.