Study shows guaranteed basic income programs spark major gains in banking access, personal savings, and long-term financial planning

Rochester, New York – A new analysis of the City’s Guaranteed Basic Income (GBI) Pilot Program is offering one of the clearest looks yet at how a steady, no-strings-attached cash benefit can reshape the financial lives of struggling households. Researchers from the Wilson Sheehan Lab for Economic Opportunities (LEO) found that participants in the year-long pilot made striking gains in how they bank, budget, and plan their financial futures, suggesting that even modest monthly support can spark meaningful economic change.

The findings come from Rochester’s effort to test whether predictable, unconditional income—$500 a month for 12 months—could help low-income residents stabilize their finances. The program delivered payments to 351 adults who were randomly chosen from more than 11,500 eligible applicants. With $2.2 million in American Rescue Plan Act funds and a $6,000 private donation, the city partnered with the Black Community Focus Fund to administer the payments while contracting LEO to study the outcomes.

Over the 12-month period, researchers noted that recipients were far more engaged with traditional banking services than non-recipients. According to the study, people receiving the GBI were 63 percent more likely to have a checking account compared to the average eligible applicant. This shift alone matters, researchers said, because access to safe, low-cost banking is often the first step toward escaping the cycle of expensive check-cashing services, informal borrowing, and financial instability.

While checking-account access saw the biggest jump, the picture around savings also told a powerful story. Participants were not significantly more likely to open a savings account during the program, but they were 158 percent more likely to actually have savings of any kind. Even more notably, they were 183 percent more likely to report that their savings had grown over the past year. For many families who started the program living month-to-month or debt-to-debt, having even a small financial cushion represents a major psychological and practical shift.

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One of the clearest areas of progress came from respondents’ ability to pursue their financial goals. GBI participants were 100 percent more likely to report they had moved forward on goals such as paying down debt, creating budgets, opening accounts, or building credit. For people living under chronic financial pressure, goal-setting often takes a back seat to daily survival. The study suggests the monthly infusion of $500 gave families enough breathing room to think ahead instead of only reacting to crisis.

Mayor Malik Evans welcomed the results, saying they confirmed what he had long believed about the value of stable financial access systems. “The GBI study provides much-needed insight into how people who barely earn enough money to survive, let alone thrive, can make the best use of a relatively modest increase in their incomes to improve their long-term financial outlook,” said Mayor Evans. “I am especially gratified to see evidenced-based research that confirms my long-held belief that safe and affordable access to banking services can serve as an essential financial building block to help our most vulnerable residents escape the cycle of poverty.”

The research also supports the mission of the City’s Bank On Rochester Coalition, an initiative focused on expanding safe and affordable banking options for residents who have historically faced barriers to entry. With the federal government planning to phase out paper checks for benefits such as Social Security and tax refunds, the push to ensure households can receive digital payments securely is becoming increasingly urgent.

But the study’s findings didn’t end with banking and savings behavior. LEO’s evaluation detected broader life changes among participants as well. GBI recipients were less likely to say they feared eviction, foreclosure, or having their utilities shut off, and they were less likely to anticipate serious material hardship in the near future. Such changes point to the ripple effects a small but steady income stream can have—reducing stress, increasing stability, and helping people avoid falling into deeper crises.

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Employment patterns also shifted. Recipients were 26 percent more likely to be employed, a rise driven mostly by increases in part-time work rather than full-time job placement. Researchers noted that this trend counters claims that guaranteed income discourages work; instead, it appeared to help participants take on flexible or supplemental work that fit their circumstances. Additionally, recipients were 25 percent more likely to drive as their main form of transportation, which may reflect increased ability to maintain vehicles or afford fuel—small but meaningful improvements that can open doors to more job options.

Although the program directly supported only 351 people, the large pool of eligible non-participants—more than 11,180 individuals—allowed for a strong comparison group. This gave researchers a clearer view of how powerful the program’s effects were when matched against people with similar backgrounds and financial conditions.

As more cities nationwide explore versions of guaranteed income, Rochester’s experience is likely to draw attention. The results show that targeted, unconditional financial support can spark practical improvements in banking, saving, and planning habits—areas that often determine whether households move toward long-term stability or fall deeper into economic insecurity.

The full study is available at: www.cityofrochester.gov/gbi.