Means-tested transfers, asset limits, and universal basic income

Asset limits in means-tested transfers can allow for the distribution of scarce aid to families most need but may disincentivize beneficiaries build savings necessary weather economic shocks. In this Economic Commentary, we examine net worth means-tested-transfer recipients along income and review literature on matter with a discussion universal basic (UBI) as policy alternative. Using 2018 panel Survey Income Program Participation, document that have smaller average than nonrecipients at every quintile distribution. We also find participants very bottom are asset poverty, an level assets surrounding testing thresholds. Recent research suggests elimination limits, such policies similar UBI, could present welfare-improving alternative current system, though not without large trade-offs.