Just giving money to poor people is perhaps the best way to fight poverty. The most recent evidence for this comes from an unexpected source: Syrian refugees.
The best way to help refugees? Give them money, not random stuff
Dylan Matthews was a senior correspondent and head writer for Vox’s Future Perfect section. He is particularly interested in global health and pandemic prevention, anti-poverty efforts, economic policy and theory, and conflicts about the right way to do philanthropy.
The International Rescue Committee, in conjunction with the University of Brasilia’s Christian Lehmann and Yale’s Daniel Masterson, conducted a study examining the effects of giving cash to 87,700 Syrian families living in informal settlements in the mountains of Lebanon; overall, more than a million Syrians are now living in Lebanon as refugees.
The cash was supposed to provide assistance for paying heat bills, so an altitude cutoff of 500 meters (1,640 feet or 0.31 miles) was set, on the grounds that families living higher up in colder areas are likelier to need heating assistance. That cutoff meant that IRC, Lehmann, and Masterson could compare what happened to families living just above and just below 500 meters. The logic is that there’s not much difference between people at 499 meters and people at 501 meters, and thus that comparing them could enable researchers to measure the effects of the cash payments.
They found that giving the cash resulted in a range of benefits:
- Those getting the payments spent more on heating fuel and clothes, and were “significantly more likely to own an oven and heater.”
- They were less likely to skip meals or have adults eat less to help children.
- They were less likely to engage in child labor or physically dangerous work, or to sell productive assets.
- Children in recipient families were more likely to go to school.
- Families getting cash were less likely to report domestic disputes.
- Those getting the cash worked a tiny bit less but there’s barely any work to go around: recipient adults worked, on average, 2.7 hours in the past four weeks, compared to 3.1 for those not getting the cash.
- Recipients spent no more on candy or beverages and significantly less on tobacco; once again, there’s no evidence that poor people blow cash transfers on booze and cigarettes.
- Survey responses suggest the cash “did not lead to increased crime or jealousy.”
Further analysis suggested that there was no evidence of increased inflation due to the transfers and that every $1 spent on the transfer translated into $2.13 additional dollars for the Lebanese economy. It turns out when you help desperately poor people start spending money, the economy as a whole benefits.
Perhaps most significantly, 80 percent of respondents said they preferred getting the assistance in cash form than in-kind. That makes sense, both in an abstract way (who wouldn’t rather have choice in how to spend their aid?) and in this particular case, because the bulk of the money wasn’t actually spent on heating fuel. Significantly more was spent on food because that was, in fact, what the recipients needed most.
Thanks to Chris Blattman for pointing me to the study.
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