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Press Release

Means-Tested Transfers and Prospects for a Universal Basic Income Program in the US

In a new Economic Commentary, Cleveland Fed researchers consider recent research suggesting that the elimination of asset requirements, such as policies similar to a universal basic income, could make some Americans better off, though not without large fiscal and macroeconomic consequences.

Andre Victor D. Luduvice and Cornelius Johnson examine the structure of the income security system of the United States and its major programs by analyzing, along the income distribution, the net worth of means-tested transfer recipients, i.e., families and individuals who qualify to receive benefits.

The researchers use the Survey of Income and Program Participation to document a contemporary picture of the means of its recipients and find program recipients have a smaller average net worth than nonbeneficiaries.

“We find transfers are substantially more relevant at the bottom of the income distribution and resources subject to testing are unevenly distributed between recipients and nonrecipients,” say the researchers. “Participants at the very bottom of the income distribution are in asset poverty and those who receive benefits have a relatively larger share of assets in property and other noncash items when compared to nonrecipients.”

Read more: Means-Tested Transfers, Asset Limits, and Universal Basic Income

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.218.1892