Canadian study finds unconditional cash transfers reduce homelessness
Melanie May | 15 September 2023 | News
A Canadian research project provided a one-time unconditional CAD$7,500 cash transfer to individuals experiencing homelessness, which reduced homelessness and generated net societal savings over one year.
Taking place in Vancouver, 50 individuals experiencing homelessness received the money, with another 65 monitored as controls. Over one year, analysis showed that cash recipients spent fewer days homeless, increased savings and spending with no increase in temptation goods spending, and generated societal net savings of $777 per recipient through spending less time in shelters.
Additional experiments revealed a lack of trust from the public in the ability of homeless individuals to manage money, and found ways to increase public support for a cash transfer policy.
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The full details can be read in a paper on the research, co-authored by Ryan Dwyer, Anita Palepu, Claire Williams, Daniel Daly-Grafstein, and Jiayling Zhao, and published on PNAS.
The paper states that traditional approaches to addressing homelessness have focused on the provision of emergency services, healthcare, and housing supports, and that while these programmes help prevent some homelessness, they do not directly address a core cause: lack of money.
It points to other research from low- and middle-income countries that has demonstrated a wide range of benefits for low-income recipients from unconditional cash transfers, including better physical health, psychological well-being, education and employment, and financial management. Among other benefits, this research also shows that unconditional cash transfers provide recipients the freedom to make their own decisions about how to spend the money, which can enhance their sense of empowerment and control, and are more likely to increase spending on durables, psychological well-being, and female empowerment than smaller monthly transfers.
However, it says, studies on cash transfers are lacking in higher-income countries, partly because of policy constraints that can see recipients lose existing benefits if they receive a cash transfer. There is also no experimental evidence on the efficacy of cash transfers in addressing homelessness.
This research project, the authors says, “adds to growing global evidence on cash transfers’ benefits for marginalized populations and strategies to increase policy support”, showing that “Although not a panacea, cash transfers may hasten housing stability with existing social supports.”
As such, the paper adds, it “provides a crucial proof of concept for providing unconditional cash transfers to individuals experiencing homelessness in a higher-income country”, as well as “useful guidelines on garnering public support for policies that aim to raise the income floor for the homeless population”.
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.