Randomized Controlled Trial (RCT) of an...
Unconditional Cash Transfer Program to Reduce Homelessness
Reviewed
An RCT of a cash transfer program for individuals experiencing homelessness, published in the August 2023 Proceedings of the National Academies of Sciences (PNAS), portrays its results as positive despite finding no discernible impact on any of the study’s pre-registered primary or secondary outcomes.
Homelessness is an economic and social crisis. In a cluster-randomized controlled trial, we address a core cause of homelessness—lack of money—by providing a one-time unconditional cash transfer of CAD$7,500 to each of 50 individuals experiencing homelessness, with another 65 as controls in Vancouver, BC. Exploratory analyses showed that over 1 year, cash recipients spent fewer days homeless, increased savings and spending with no increase in temptation good spending, and generated societal net savings of $777 per recipient via reduced time in shelters. Additional experiments revealed public mistrust toward the ability of homeless individuals to manage money and demonstrated interventions to increase public support for a cash transfer policy using counter-stereotypical or utilitarian messaging. Together, this research offers a new approach to address homelessness and provides insights into homelessness reduction policies.
Homelessness is an economic and social crisis. In a cluster-randomized controlled trial, we address a core cause of homelessness – lack of money – by providing a one-time unconditional cash transfer of CAD$7,500 to 53 individuals in 10 homeless shelters with another 91 individuals in 12 homeless shelters serving as control in Vancouver, BC. Exploratory analyses showed that over 1 year, 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 participant due to reduced time in shelters.
We found no statistically significant effects on the study’s preregistered primary and secondary outcomes, including cognitive functioning (fluid intelligence, executive functioning), and subjective well-being (satisfaction with life, positive and negative affect, self-efficacy), measured one month after study entry. We found beneficial effects on some exploratory outcomes, such as number of days spent homeless over 1 year, but given the large number of exploratory analyses and attrition of more than half of the sample, these findings are only preliminary and best viewed as hypotheses to investigate in future research.
Additional experiments revealed public mistrust toward the ability of homeless individuals to manage money and demonstrated interventions to increase public support for a cash transfer policy using counter-stereotypical or utilitarian messaging. Together, this research offers a new approach to address homelessness and
provides insights into homelessness reduction policies.
No-Spin's Study Overview
An RCT of a one-time, unconditional cash gift of CAD $7500 to individuals experiencing homelessness in Vancouver, British Columbia found no discernible impact on any primary or secondary study outcome. The study found an effect on homelessness (an exploratory outcome) but we believe it is unreliable due to sample loss of over 50%.
Program and Study Design:
- The study randomly assigned 22 homeless shelters in Vancouver, British Columbia - containing a total of 144 homeless participants - to treatment (a one-time cash transfer of CAD $7500 per person) vs control (services as usual).
Findings:
- The study found no discernible impact on any preregistered primary outcomes (related to cognitive functioning and subjective well-being).
- We believe the claimed effect on homelessness over 1 year (an exploratory outcome) is unreliable for multiple reasons, but most notably: The study lost more than half its sample over the year, and the loss was higher in the control group (63%) than treatment group (51%), undermining randomization.
Comment:
- Unfortunately, the study received uncritical press coverage in the Washington Post (9/1/23).
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