Cash transfers reduce homeless, but why aren't we doing it?

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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Photo by Jonathan Kho Ming Jun on Unsplash

Photo by Jonathan Kho Ming Jun on Unsplash

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.

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