Giving poor people money gives them tools to invest in their job prospects, their future, and a more industry and service-oriented local economy. Policymakers throughout the world struggle to boost employment. In poorer countries, development organizations and governments have traditionally relied on solutions like training vouchers or microfinance tools. These programs often involve extensive organization and monitoring to run effectively, all of which require additional money, resources and time. An alternative is putting cash directly in the hands of the poor themselves, leaving them to decide how best to spend the money. While simpler to implement, development groups and governments are concerned that the programs won’t work. Will recipients use cash grants as promised? On their own, can they generate successful businesses? And, assuming they do, can this sort of growth be sustained over time? We have almost no evidence on the effectiveness of unconditional cash transfers to the poor and unemployed to judge.
June 01, 2015