If giving cash to poor people, with no questions asked, no strings attached, could be shown to successfully improve the health and education of children, should we do it?
“Unconditional Cash Transfers work better than almost anyone would have expected. They dent the stereotype of poor people as inherently feckless and ignorant”.
This is the conclusion reached by The Economist in a feature on giving cash to the poor. It neatly summarises the evidence regarding what works best to improve the lives of the poor and strikes at the heart of the prejudices we hold about those in poverty.
There’s a claim that the cost of child poverty to New Zealand is something like $8 billion per year. Handing out a few billion dollars to improve the lives and long term outcomes of hundreds of thousands of children shouldn’t our Government seriously consider it?
An American example:
In a “natural experiment” called the “Great Smoky Mountains Study of Youth” in western North Carolina, profits from a casino built on an Eastern Cherokee reservation were distributed to some but not all families in the local community (tribe members received about US$4000 per adult per year). Almost overnight, the receipt of the casino profits moved some of these children (who coincidentally had been researched since birth) out of income poverty.
These children and their families underwent a remarkable change. The children became less anxious and depressed, stayed in school longer and committed less crime; parents had better mental health, and had improved parenting behaviours. These improvements were greatest for the poorest families. No such changes were found in those families who did not receive the casino payments.
But that is a small proportion of people in one part of one state.
In Norway in the 1970s an offshore oil field was discovered, bringing a short-lived boost in incomes to certain areas of the country. For those children born into poor households the sharp increase in incomes had a significant impact on their educational achievement.
Again only some people in parts of Norway. Did this merely give some people an advantage over others to improve their situation? Or would it work on a country wide scale?
This is from Stuff of – Giving cash to the poor is the best way to fix poverty.
OPINION: They might not be popular, but cash transfers with no strings attached are the best bet for reducing family poverty, writes Jess Berentson-Shaw.
Dr Jess Berentson-Shaw is a science researcher at the Morgan Foundation.
It’s frustrating that our politicians prefer to blame parents and champion policies that push poor parents into low-paid work, despite there being clear evidence that does not help children. Their approach sees the kids get dumped into childcare, and unless that childcare is very high quality (in our poorest communities it often isn’t) they may end up worse off.
Like many before us, we asked “what is the single most effective action we can take to improve the lives of families and children in poverty in New Zealand right now?” The answer from the evidence is clear and conclusive: we should give them money, no strings attached, especially when the children are young.
The only time in recent years New Zealand reduced child poverty was when we gave cash to some poor via Working for Families.
The fact is that everyone would be better off if we just gave poor parents the money.
Boost the incomes of the poor with no conditions attached?