New Research Proves Giving People Cash Doesn’t Lead to More Drug Use or Violent Crime

Alaska has been running a massive, real-world experiment for decades.

07 May 2026, 20:52 by Mihai Andrei · ZME Science

Image via Unsplash.

Every autumn, Alaska residents take part in a ritual that has nothing to do with the northern lights or the first deep freeze. Instead, it’s a mass injection of liquidity. On a single day, usually in October, the state government cuts a check to every single resident. Usually, it’s around $1,500. It is a dividend from the state’s massive oil fund, and everyone gets the same amount.

This makes Alaska a very interesting economics test site. Skeptics say that if you just give people money (as if you would with a basic income, for instance), they’ll just go crazy. Or rather, to put it more technically, they’ll spend on “temptation goods” like drugs and alcohol.

A new study put this idea to the test. After analyzing a decade of data, they found, well, nothing.

“Despite commonly held fears, we find no such increases in our data . . . These results provide no evidence to suggest that direct cash payments increase the risk of injury or death.”

Debunking the “Vice” Narrative

The argument that cash transfers fuel substance abuse is one of the most persistent tropes in politics. To see if there was any truth to it, researchers isolated “unnatural deaths” — a category including suicides, homicides, and accidents. If Alaskans were using their dividends to fuel a binge, these numbers should have spiked. They didn’t.

“Those fears are unfounded,” says NYU sociologist Sarah Cowan, founder and executive director of the university’s Cash Transfer Lab, which conducted the study. “Our long-term study of a state’s population shows no connection between cash transfers and serious injury or death.”

The team looked at a massive dataset: 36,556 traumatic injuries and 43,170 deaths occurring between 2009 and 2019. They focused on “traumatic” events — the kind that land you in the hospital for observation or, worse, in the morgue.

On the day the money hit, the estimated effect on traumatic injury was a decrease of 0.0002 per 10,000 people — across the whole state, this is essentially zero. Mortality showed a tiny, statistically insignificant blip of 0.11 additional deaths statewide. As the researchers noted, these effects are “both very small and not statistically significant”.

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They even checked to see if things were different in the big cities like Anchorage and Fairbanks, thinking urban access to vice might change the outcome. It didn’t. The cash arrived, the bills got paid, and life went on as usual.

“As a practicing emergency physician I worried about yearly PFD leading to immediate harm, but as Alaska’s chief medical officer and public health official, I know how important it is to review the data objectively,” adds Anne Zink, chief medical officer for the State of Alaska from 2019 to 2024 and now a senior fellow at the Yale School of Public Health.

“This study provides the kind of population-level evidence that public health officials and policymakers need when evaluating guaranteed income programs. When looking across the entire state’s population over 11 years, there was no evidence of increased trauma or mortality temporally associated with the PFD cash transfer.”

This Matters a Lot for Poverty

This isn’t just about Alaska. It’s a proof of concept. Cities all around the world are looking for ways to alleviate poverty. Offering people a basic, unconditional income, is one of the most discussed approaches. But those who don’t like such ideas are quick to warn that the poor will misuse money, For instance, former Senator Joe Manchin famously privately raised concerns that parents might use expanded Child Tax Credit checks to buy drugs. It’s a narrative as old as the debate itself: the “undeserving poor” cannot be trusted with the agency that cash provides.

Earlier studies have had some mixed findings. This one, however, is pretty clear.

There are, of course, some caveats. Alaska is a unique place. The income is predictable; Alaskans know it’s coming every year, which means they might not “panic spend” the way someone receiving a one-time, unexpected stimulus check might. The researchers also noted that they couldn’t see the “minor” injuries — the ones that didn’t require a hospital stay.

But the data suggests that cash, in addition to not being dangerous, is often a lifeline. While this specific paper focused on the absence of harm, it notes that a growing body of research shows cash transfers actually improve health over the long term. Previous studies have linked the PFD and similar programs like the Earned Income Tax Credit (EITC) to better birth weights, higher breastfeeding rates, and even a reduction in childhood obesity.