Here's All The Ways Giving Cash To Poor People Helps

Ending poverty may be as simple as putting cash into the hands of people who need it.

While supporting aid organizations and donating goods to people in need have their merits, a new report found that transferring money to poor people has far-reaching benefits.

The Overseas Development Institute analyzed data from 165 studies, which covered cash transfer programs in low- and middle-income countries. These programs give cash grants to needy households. Some come with conditions, such as spending a certain amount of food, while others don’t.

The report concluded that these initiatives help reduce poverty, improve education and decrease child labor, among other benefits. But the programs may not have as strong of an impact on long-term issues, such as the weight and height of children ― which could also be due to the fact that these areas require an investment over a longer period of time.

These are the following areas that saw dramatic improvements.

Cash Transfers Reduce Poverty To A Certain Degree

The report found “strong” evidence that cash transfers are associated with reductions in monetary poverty. Households had more money to spend and increased the amount they budgeted toward food. However, there wasn’t a reduction in poverty rates in all areas, but that may have been because the installments weren’t high enough and weren’t received over a long enough period of time, according to the report.

Cash Transfers Empower Women

For women and girls, participating in cash transfer programs means getting autonomy over a number of areas in life, and not just economical matters.

They have less of a chance of getting married and getting pregnant early. These women were physically abused less, but in some instances faced more emotional abuse or controlling behavior, according to the report.

Cash Transfers Lead To Improved School Attendance

Cash transfer programs often translate into increased attendance at school, according to the report. But there were varied results when it came to test scores.

Evidence suggests that cash transfer programs translate into improved scores on cognitive development tests. There were mixed results on language test scores and no significant improvement on math and composite test scores.

Cash Transfers Push Adults To Work And Curb Child Labor

Getting an infusion of cash doesn’t disincentivize adults from working. In fact, most studies showed that it does the opposite. There was an increase in the number of working adults and the intensity at which they worked in most cases. Drops in employment usually related to the elderly or people caring for dependents.

There is “strong” evidence that cash transfer programs are associated with a decrease in child labor. Most of that evidence though, was drawn from Latin America, but none of the programs in sub-Saharan Africa found a statistically significant impact on child labor.

Cash Transfers Help People Get Healthier

Cash transfers play a crucial role in enabling households to increase dietary diversity and gain access to health services. However, there is less evidence showing that the programs significantly affect children’s height and weight, but that may be due to the fact that those indicators rely on a wider set of variables.