If You Give Poor People Money, They Won’t Just Spend It On Drugs And Alcohol?!
It may seem like a crazy concept: just giving poor people money with no strings attached and trusting that they’ll use it for what they need. But that’s exactly what a charity called GiveDirectly did in a tiny Kenyan village in a rural district called Siaya. According to their levels of need, the charity would give families as much as $1,000 in two payments paid to their cell phone, equal to almost a year’s salary in this area. Researchers conducted a study with a group that received the aid and a group that did not. Their findings:
“We don’t see people spending money on alcohol and tobacco,” [Johannes Haushofer, an economist at MIT's Poverty Action Lab who was one of the study's co-authors] says. “Instead we see them investing in their kids’ education, we see them investing in health care. They buy more and better food.” People used the money to buy cows and start businesses. Their kids went hungry less often.
People also used the money to thatch their roofs or buy motorcycles to ferry people around for a fee. Another bought a mill so he could start a business grinding corn. One man was gossiped about shamelessly by the villagers because he had nothing to show for his investment. Turns out he used the money to pay a dowry so he could remarry. Strangely no one opened up a bar or started an all-in poker tournament.
Carol Bellamy, the former director of UNICEF, was skeptical of how GiveDirectly operated, but after seeing the results changed her tune. ”I was impressed,” she says. “The return on investment was more positive than I would have anticipated.”
While the study found that people were happier because they were less stressed out, it did not seem to impact people’s health significantly. And the impact of poverty on the children of the village will likely be long-term. Another recent study, this time out of the University of Denver, found that the stress of poverty has the same effect on a person’s cognitive ability as pulling constant all-nighters, knocking as much as thirteen percent off of a person’s IQ.
But it can be argued the results in America would be similar. After an EBT glitch at several Louisiana Wal-Marts gave recipients unlimited balances on their cards, it was the food that people stocked up on. “There was no food left on any of the shelves, and no meat left. The grocery part of Wal-Mart was totally decimated,” said Springhill Police Chief Will Lyn.”
[photo credit: DailyCognition.com]
Latest posts by Emily Epstein White | Assoc. Blog Editor (see all)
- Apparently Obama Is **Still** The Antichrist - November 21, 2013
- To Question Obamacare, It Helps To Understand Obamacare - October 30, 2013
- Would You Protect A Klan Member From An Angry Mob? - October 30, 2013