When news breaks, you need to understand what matters — and what to do about it. At Vox, our mission to help you make sense of the world has never been more vital. We rely on readers like you to fund our journalism. Will you support our work and become a Vox Member today? The results show the power of cash transfers to reduce homelessness.
Ray, a man in his 50s, used to live in an emergency homeless shelter in Vancouver, Canada. Then he participated in a study that changed his life. He was able to pay for a place to live and courses to prepare him for his dream job. It identified 50 people in the Vancouver area who had become homeless in the past two years. And it told them to do whatever they wanted with the cash. Even after the money was there, it took me a week for it to sink in. Over the next year, the study followed up with the recipients periodically, asking how they were spending the money and what was happening in their lives.
Both cash recipients and people in the control group got access to workshops and coaching focused on developing life skills and plans. The results proved that prediction wrong.
The recipients of the cash transfers did not increase spending on drugs, tobacco, and alcohol, but did increase spending on food, clothes, and rent, according to self-reports. They found that pointing out how cash transfers actually produce net savings for society, as well as showing how homeless people spend the money, are both effective ways to counter stereotypes among the public. The general idea behind basic income — that the government should give every citizen a monthly infusion of free money with no strings attached — has gained momentum in the past few years, with several countries running pilot programs to test it.
And the evidence so far shows that getting a basic income tends to boost happiness , health , school attendance , and trust in social institutions , while reducing crime. Recipients generally spend the money on necessities like food, clothes, and utility bills. The big lump sum at the front end gives people a lot more agency. In addition to getting housing, he used the cash transfer to take the courses he needed to become a front-line worker serving people with addictions.
