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What happens when you give 50 homeless people $7,500 each? A B.C. study found out

Diversity, Inclusion & Equity Finance Government

Summary

The University of British Columbia found that homeless people spend most of their government assistance on basic living expenses instead of “temptation goods”. In a study led by researcher Jiaying Zhao, 50 homeless people in B.C. were given $7,500 each to do as they wished. The team found that participants spent most of the amount on rent, clothing, and food instead of “temptation goods” such as alcohol, drugs, and cigarettes, as suggested by common misconceptions. Each recipient even generated a net saving of approximately $800 through this handout. The researchers tracked each recipient for a year after they received the money and compared the data against a control group that had not received the handout. The results show no difference in the spending behaviour of “temptation goods” between the two. It should be noted that this study did not include individuals with severe substance or alcohol use or mental health symptoms. Zhao and her team are now working with politicians and policymakers to advocate for a national framework for a guaranteed basic income and cash-transfer based policies.

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