The Long-Term Effects of Cash Assistance

Abstract

We investigate the long-term effects of cash assistance on beneficiaries and their children among participants in the Seattle-Denver Income Maintenance Experiment. Treated families in this randomized experiment received thousands of dollars 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, finding that treatment decreased adults' postexperimental annual earnings by $1,800 and increased their disability benefit applications. Effects were strongest around retirement age; evidence suggests possible occupational mechanisms. In contrast, children experienced no significant effects on earnings or interaction with the disability system. (JEL G51, H55, H75, I32, I38, J12, J14)