Charity for charity’s sake: Researcher explores the health benefits of giving cash without strings attached

Tuesday, December 26, 2017 by

They say it’s better to give than to receive. But just how true is it? Researchers from the University of Otago in New Zealand have shown that as far as giving out money to people in low to middle-class countries is concerned: it has a distinctly positive effect. Their study also shows that governments can improve health in countries where cash is provided freely to people who are living in poverty.

The study, titled “Unconditional cash transfers for reducing poverty and vulnerabilities,” takes a look at the possible benefits of giving people money with no strings attached. The researchers specifically studied the effects on the general use of health services as well as health outcomes in the countries where the subjects originated. In total, the researchers identified 21 different studies to put together one major review where they showcased their findings.

Out of the 21 studies collected for the review, 16 were found to be experimental. Given that there are more and more governments around the world that are beginning to start their unconditional cash transfer (UCT) programs, there may eventually be more sources for data. A country that has this plan currently in place is New Zealand, which has an estimated population of 800 million people.

For now, the data shows that UCT can reduce the likelihood of having had illnesses in the past few weeks or months by about 27 percent. This is according to Dr. Frank Pega, an honorary research fellow from the University of Otago, Wellington. “The review also showed that these cash transfers probably led to a moderate increase in the likelihood of children in recipient families attending school, and that they may improve food security, nutrition, and the amount of money recipients spent on health care,” said Pega.

General effects of UCT

The researchers used data from various countries that detail the results of both experimental and non-experimental UCT programs, most of which were funded by national governments or international organizations. What they found was that the use of UCTs reduces the likelihood of having had any illnesses in recent weeks or months, and also improves the likelihood of having secure access to food and diversity in one’s diet.

Nick Wilson, a professor at the University of Otago, Wellington, and an associate of Dr. Pega says that the research results are promising for health and social benefits. “This study shows that these types of cash transfers are an important form of international governmental development assistance for improving health among people living in poverty,” said Wilson.

Are UCTs for everyone?

It’s important to note that many of the research findings are common sense things. That is, the families that are spending more on health services are, of course, able to do so because they are getting the money freely from the UCTs of their respective countries. It would have been interesting to know if other areas of their lives could have been improved had they not needed to pay for the health services that they availed.

Based on the idea that it could have a positive impact on the low to middle-class income population of different countries, should the entire world start implementing various kinds of UCT programs? The core tenet of UCTs, being a source of money that doesn’t impose any conditions on the recipient, is the same thing that’s driving ideas like Universal Basic Income (UBI) forward.

UBI, as an idea, is one that’s not quite fully formed yet. Similarly, all other kinds of UCTs will require closer examination to determine if they are indeed worth considering.

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