Nahom Kegne

Guaranteed Income as a Search Subsidy: Local Labor Market Structure, Evaluation Design, and the Limits of the Stockton–Compton Comparison

Started Apr. 9, 2026

Abstract or project description

This project looks at whether guaranteed income pilots should be judged only by how many recipients keep working. Drawing on labor search theory, I argue that cash transfers can act as a "search subsidy": by easing short-term money pressure, they may let workers turn down poor job offers and hold out for better, more stable ones. I test this idea by comparing two U.S. pilots whose employment results pointed in opposite directions. In Stockton, California (SEED), full-time employment rose in the first year, a pre-pandemic period with a growing logistics sector. In the Compton Pledge, run during the pandemic recovery, participation fell among recipients who had been working part-time. I suggest that three conditions shape whether guaranteed income improves job outcomes: transfers large enough to matter, good jobs that workers can actually reach, and evaluation periods long enough to capture a longer job search. The comparison also shows the limits of the evidence, since differences in sample size, timing and study design make the two cities hard to compare directly. I end by recommending larger studies across many cities that track job quality, not just whether people are working.