Cash grants to people with unexpected bills successfully prevents homelessness

In The impact of homelessness prevention programs on homelessness (Scihub mirror), a group of academic and government economists show that giving an average of $1,000 to people in danger of losing their homes due to unexpected bills (for example, emergency medical bills) is a successful strategy for preventing homelessness, which costs society a lot more than $1,000 — more importantly, these kinds of cash grants do not create a culture of "dependency" that leads to recklessness, nor does it have a merely temporary effect.

The randomized trial tracked outcomes for two years and found that the effect sustained itself for that whole time. Providing the grants — operating call centers and administering the program — costs about $10,300 per family (though this could be reduced to $6,300 by focusing on just the poorest families); homelessness costs the state an average of $20,000 per family.

Shinn says the study shows that these types of programs are absolutely effective and worthy of more consistent funding. And economics aside, there's a definite moral benefit to helping people staring down the real possibility of becoming homeless, says social scientist Dennis Culhane at the University of Pennsylvania. "These are generally very, very poor people for whom our safety net has been dramatically eroded over the last 30 years," he says.

Culhane says the programs can help prevent people from having to resort to prostitution and other dangerous behaviors to pay off debts from payday loans or other means of making ends meet. "These are not things that are easily quantifiable the way an economist would do it, but I don't lose sleep at night about the fact that a lot of very poor people are getting emergency cash assistance when facing a financial crisis—even if they wouldn't have become homeless without it."

The impact of homelessness prevention programs on homelessness [William N. Evans, James X. Sullivan, Melanie Wallskog/Science] (Scihub mirror)

A bit of cash can keep someone off the streets for 2 years or more
[David Shultz/Science]

(via Naked Capitalism)

(Image: Nickelsville, Joe Mabel, GFDL)