What is it about?

This study shows that a one-time unconditional cash transfer of $7,500 reduced homelessness, increased spending on rent and food, and generated a net savings of $777 for society via reduced reliance on social services. However, people are reluctant to give individuals in homelessness cash. One reason is a mistrust of their ability to manage money. In fact, people predicted that an individual in homelessness receiving the cash transfer will spend $329 per month on alcohol, drugs, and cigarettes, whereas a non-homeless individual will spend $182. To combat this mistrust, a counter-stereotype message or a utilitarian message describing the benefits of the cash transfer helps to improve public support for a future cash transfer policy.

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Why is it important?

This study suggests that cash transfers may offer a cost-effective solution to reduce homelessness, adding to the growing global evidence demonstrating the benefits of cash transfers to marginalized populations. The study also demonstrates how to overcome public resistance to a cash transfer policy due to people’s mistrust in the recipients. Specifically, policy support can be bolstered by showing counter-stereotypical or utilitarian benefits of the cash transfer. The study provides useful guidelines on garnering public support for policies that aim to raise the income floor for the homeless population.

Perspectives

I hope this study offers new perspectives on how cash transfer can benefit people experiencing homelessness, and helps to move public policy to better support marginalized populations.

Jiaying Zhao
University of British Columbia

Read the Original

This page is a summary of: Unconditional cash transfers reduce homelessness, Proceedings of the National Academy of Sciences, August 2023, Proceedings of the National Academy of Sciences,
DOI: 10.1073/pnas.2222103120.
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