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Economics IE: May 27

Madison Aument

With 91.9 KVCR News, I'm Madison Aument. This is Economics IE, where we talk to experts from the Inland Empire to take the temperature of the region's economic situation. Today I'm speaking with Cameron Shelton, the McMahon Family Professor of Political Economy at Claremont McKenna College. Thanks for being here today, Cameron

Cameron Shelton

Madison, thanks so much for having me and for your interest.

Madison Aument

Let's first talk about this guaranteed income pilot program. What is the inland SoCal, United Way's guaranteed income pilot program? And who is it for?

Cameron Shelton

Yeah, this is an exciting program. Our pilot is part of a broader study on guaranteed income that's co-sponsored by the state of California. So in fiscal year 2021-22, the California state budget set aside funds for a set of pilot programs on guaranteed income and Inland SoCal United Way was one of the seven sites that the state selected. And so the Inland SoCal program gives money to targets to different groups in Riverside and San Bernardino counties. So the first group are 500, low income pregnant women. And the second group are 120 young men and women who are aging out of the foster youth program and setting out on their own for the first time. And so the pregnant women who are selected for the program will receive $600 a month for 18 months. And the foster youth selected for the program will receive $750 a month for 18 months. And that that money is jointly provided, it's provided in part by the state of California. And in part, it was raised by Inland SoCal United Way. And so the idea is to give money to these individuals and see how it affects their lives. And it's part of a large movement among both academics and practitioners in thinking about social safety nets. And the current thinking is that they might be most effective when they focus on cash transfers.

Madison Aument

So as an economist, what's your role with this pilot program?

Cameron Shelton

I'm working with Dr. Danielle Kilchenstein at Inland SoCal United Way. And our goal is to evaluate the effects of this way of trying to help people. And so we're trying to quantify the efficacy of the program. So she and I designed the study dimensions like what questions we would ask the participants directly, what other administrative data we would request from the state how we would form treatment and control groups so that we can scientifically infer causal effects of the of the payments, how we would provide ancillary benefits and counseling and those sorts of other benefits counseling is, is both a requirement of this pilot program. And it's also a central mission of Inland SoCal United Way. And so, you know, we're designing how those things go together, we're involved in, in designing the study, right, so that we can have confidence in the conclusions because of the methods by which we arrived at them. You know, by now there's a rather large body of research on these and similar questions and programs. So we sort of designed our study to try to address some questions that we see are outstanding. And I'm particularly interested in two issues. First, can we understand under which conditions this extra money helps people improve their situation and leads to a sustainable improvement? You know, why might it work in some situations and not others? And then second, what's the role of other benefits counseling and how do guaranteed income payments and benefits counseling interact? The Lowe Institute of Political Economy at Claremont McKenna College, which I'm the director of, is funding a part of this study in which we provide financial counseling to the participants. And so the low Institute funded an experiment whereby we're going to partner with a service called balance, to provide such financial counseling to a subset of their participants. And we're trying to see whether that counseling is effective in itself, but also whether it improves the effectiveness of the guaranteed income payments by helping folks understand how to achieve their goals better.

Madison Aument

In collecting data, what are you specifically looking for? And then will the findings of this study inform whether this is something that continues in the Inland Empire?

Cameron Shelton

We care about many central aspects of these people's lives? Right? It's sort of a holistic study in that way, we're hoping to be able to answer questions like, Does giving this money help them maintain a stable home in a safe neighborhood? Does it reduce mental and physical stress? You know, those are the kinds of data that we're collecting and the kind of questions that we've designed, you know, that we hope to be able to answer, you know, the money is inevitably going to be more transformative for some participants than for others. And that might be entirely luck, but it might be due to some of the challenges faced by some people or the way in which we've structured the program. And so you know, if we can understand that heterogeneity, and like give us clues as to how to make programs as effective as possible. The last thing that you asked was, how's the study used? I, I know that they will report back to the state led Just nature and the governor in Sacramento. I know that Dr. Kilson, Stein and I and some others will be writing some white papers and some research that will be much more broadly available. And so I hope, and I expect that our results will be considered by both the California State Legislature and then also hopefully other groups around the country and around the world who are considering and designing policies along these lines.

Madison Aument

Well, thank you so much for your time, Cameron.

Cameron Shelton

Thanks so much, Madison. Appreciate your interest and your questions.

Madison Aument

Join us again next Monday for Economics IE. You can find this segment and others on our website at kvcrnews.org/econie support for this segment comes from the Nowak family. For KVCR News, I'm Madison Aument.