Seattle Denver Income Maintenance Experiment

Seattle-Denver Income Maintenance Experiment: A Landmark Study

Origins and Purpose

The Seattle-Denver Income Maintenance Experiment (SIMEDIME) was the culmination of a series of four large-scale experiments conducted in the 1970s to evaluate the potential effects of negative income tax programs. The largest and most comprehensive of these experiments, SIMEDIME involved 4,800 families residing in Seattle and Denver from 1971 to 1982.

Methodology and Key Findings

The experiment randomly assigned families to one of three treatment groups: one receiving a guaranteed minimum annual income, another receiving a smaller guaranteed income plus an hourly wage supplement, and a control group receiving no assistance. The study's findings revealed that a guaranteed minimum income had a modest negative effect on labor supply, primarily among married women and teenagers, but did not significantly affect work effort among adult males.

SIMEDIME also found that the negative income tax did not lead to increased consumption of alcohol or other drugs, or to a decline in marital stability. However, it did observe slight increases in fertility rates among the treatment group.

Legacy and Significance

The Seattle-Denver Income Maintenance Experiment remains an influential and widely cited study in the field of economics. Its findings have informed policy discussions and research on the potential effects of negative income tax programs and other forms of income support.

While the specific policy recommendations arising from SIMEDIME have not been implemented, its results continue to shape debates about the design and evaluation of social welfare programs aimed at reducing poverty and inequality.