A randomized control trial conducted in Vancouver found that providing unconditional cash transfers to unhoused individuals can significantly reduce their risk of homelessness. The researchers provided a one-time unconditional $7,500 cash transfer to individuals experiencing homelessness, which reduced homelessness and generated net societal savings over one year.
In the year after receiving the one-time cash transfer, participants spent fewer days unhoused and increased their savings and spending. Net societal savings of at least $777 per recipient were gained via reduced time spent in shelters.
Two additional studies cited in this paper revealed public mistrust in the ability of individuals experiencing homelessness to manage money and the benefit of counter-stereotypical or utilitarian messaging in garnering policy support for cash transfers. Yet contrary to these harmful stereotypes, participants in this trial did not increase their spending on what the authors refer to as “temptation goods” like alcohol and cigarettes.
However, the authors note that their findings are limited by the trial’s small sample size and lost contact with participants, which caused the sample size to shrink significantly over the course of the study. The authors called for future research to confirm the effectiveness of unconditional cash transfers in reducing homelessness with a larger sample of participants.