What happens when someone who is homeless receives a cash payment?
A small project in Vancouver, BC, which gave a lump sum of $7,500 to people who were homeless, has caught the attention of The Guardian. The Guardian does not carry a lot of stories about Canada, so we were curious about why this story got the nod. The cash transfer program in Vancouver had been inspired by a similar program in England, but there were other things that drew the reporter’s attention.
The people who came up with the cash transfer program partnered with academics to study three separate but related questions:
- did the cash transfer make a difference?
- are housed people’s beliefs about homeless people accurate?
- do results about the cash transfer project affect attitudes towards public spending?
A brief look at each of these questions is helpful in understanding why the project deserves international attention.
Did the cash transfer make a difference?
Policy makers and program administrators are often constrained from handing out lump sums of cash because it is assumed that the recipients will spend it unwisely. The project, which was funded with money raised through crowdsourcing, provided a good way to test that assumption. Briefly:
- the people who received the transfer spent it on housing and food. They did not spend it all on drugs on alcohol either immediately or over the year after they received the money.
- the people who received the up front cash transfers moved to housing faster than people who did not receive a transfer. The ones who did not receive a transfer eventually moved into housing.
- the people who received the up front cash spent significantly less time in emergency shelters than the people who did not. Taking the cash transfer of $7,500 into account, the government could save $777 per person on the amount it is currently spending on emergency accommodation.
Are housed people’s beliefs about homeless people accurate?
Did the behaviour of the people who were part of the cash transfer project align with public ideas about people who were homeless? The short answer is no. Compared with the public ideas about homeless people, the people who were part of the study were less likely to use alcohol or drugs and less likely to have a mental illness. This applied both to the people who received the cash transfer and the people in the ‘control’ group, who did not.
Did the results of the cash transfer project affect housed people’s beliefs?
The short answer is yes. An omnibus survey of housed people tested for willingness to support a cash transfer program. Some of the survey respondents were told about the cash transfer experiment and the results. Others were not. The respondents who were told about the results were significantly more likely to support a publicly funded cash transfer program.
Cecco’s article raises the profile of this cash transfer project, which shows that evidence affects how housed people view homelessness. This should be encouraging for people who are homeless, researchers, decision makers and service providers who know what works, and have to contend with public perceptions that are inaccurate.
Read more of Cecco’s coverage in The Guardian: Canada study debunks stereotypes of homeless people’s spending habits
You can read more about the academic research in Proceedings of the National Academy of Sciences: Unconditional Cash Transfers Reduce Homelessness
Finally, it should be noted that the cash transfer project and accompanying research joins other efforts that are working on ways to shift opinion away from unproductive ‘solutions’ like clearing encampments.