Basic income—a regular, guaranteed, and unconditional cash transfer—promises to improve the lives of recipients. Contemporaneous research, however, suggests limited scope for subjective well-being improvements in high-income countries, based on small medium-sized cash transfer programs.

We conducted a preregistered randomized trial in Germany to study the effect of a generous cash transfer program on recipients’ self-reported well-being. Treated participants received monthly cash transfers of EUR 1,200 for three years. Cash transfers improved mental health by 0.349 standard9deviations (Fisher’s exact p-value <0.001), purpose in life by 0.250 SD (p-value<0.01), and life satisfaction by 0.422 SD (p-value<0.001). These effects are large and robust to multi-11ple hypothesis testing adjustments.

Improvement in life satisfaction extends across various domains, including financial, health, sleep, leisure, and work satisfaction. Treatment effects stay constant over time for most outcomes, except that the effect on financial satisfaction decreases, and the effects on the purpose of life and work satisfaction increase.

In a mediation analysis, improved autonomy mediates well-being improvements. This is consistent with statements of treated participants, suggesting that the cash transfers enabled life and job changes, in addition to increasing financial security. Our findings suggest that cash transfer programs can lead to lasting well-being improvements if they are regular, guaranteed, unconditional, and generous enough to enable life changes.