Cash is flexible and gives people increased agency to decide how to prioritize their needs. Some recipients were able to use the cash to take steps toward improving their health. But for many others, cash is one piece of the puzzle in confronting deep-seated health disparities.
Our findings suggest that unconditional cash transfers increase recipients’ use of hospital and emergency department care and some types of office-based medical care—particularly dental and specialist care. Recipients reported decreased problematic alcohol use and some types of illicit drug abuse. We also find notable improvements in stress, mental distress, and food security during the first year of the study, but the effects fade by the second year. Although we find no significant effects on measures of physical health, self-reported access to health care, or on health-promoting behaviors such as exercise or sleep, the increased utilization of medical care may lead to long-term health benefits.
On average, unconditional cash transfers increased the use of office-based, hospital, and emergency department care.
Compared to the average control participant, the average recipient experienced:
- A 26% increase in the number of hospitalizations in the last year
- A 10% increase in the probability of having any emergency department (ED) visit in the last year
- A 10% increase in the the probability of receiving any dental care in the last year
- An 8% increase in the number of reported office visits in the last year1
- A 6% increase in the probability of having seen a specialist in the last year1
We also find that recipients significantly increased their monthly spending on medical care by roughly $20 more than the average control participant, not including the cost of health insurance premiums.
Evidence suggests that the cash reduced certain types of alcohol and drug abuse.
When asked how many days out of the previous 30 they consumed at least one alcoholic beverage, the average for recipients was about 0.3 days more per month than control participants.1 There was not a significant difference in the total number of drinks consumed per month. Despite the small uptick in drinking frequency, we find a decrease in drinking that interferes with responsibilities and days using painkillers not prescribed to them. Relative to control participants, recipients report:
- A 20% decrease in drinking interfering with responsibilities1
- A 53% decrease in days using painkillers not prescribed to them1
One recipient, Ivy, used the cash transfers to help her move into a sober living house. At the end of the program, Ivy was still sober. For participants like Ivy, the cash gave them agency to take steps toward improving their health. Though we do not see changes in health in the short term, these steps could lead to health benefits in the future.
The cash led to large and significant improvements in mental health and food security in the first year of the program. These effects faded in subsequent years.
In the first year, we find that recipients experienced large improvements in food security and self-reported measures of stress and mental distress. Yet these improvements were short-lived. Why? Though we cannot say for certain, we have several theories.
Participants began receiving the unconditional cash transfers in November 2020. Shortly thereafter, the US government passed the second major set of COVID relief packages. As many participants were eligible for support, these added benefits might have boosted the effects of the cash transfers on mental health and food security during the first year. But inflation continued to climb, reaching 5.4% by September 2021. The summer of 2021 also saw the first of many phase-outs of pandemic-era social protection programs. The expanded Child Tax Credit, which provided up to $3,600 per child under 6 and $3,000 per child 6-17 annually, lapsed at the end of 2021. The roll back of support continued throughout the remainder of the study, as several other programs—including universal free lunches for school-aged children and enhanced SNAP benefits—expired in the fall of 2023.
Consequently, though the cash led to improvements in mental health and food security in the first year, it is possible that macroeconomic factors like the rise in food prices and the loss of pandemic-era aid may have eroded initial improvements. It is also plausible that the relief the unconditional cash provided in year one led to a heightened awareness of stress and food insecurity during years two and three. We are continuing to analyze the data and collect post-transfer data to gain additional insights.
The effects of the cash varied amongst recipients, with greater impact for some.
The impact of the cash on reductions in drug and alcohol abuse was greater for male recipients.2 Compared to male control participants, male recipients reported:
- A 41% decrease in being under the influence in a dangerous situation
- A 45% decrease in drinking interfering with responsibilities
- A 35% decrease in drinking causing arguments with others
- An 81% decrease in days using painkillers not prescribed to them
Recipients who reported skipping necessary medical care because they could not afford it at time of enrollment also reported better access to healthcare, increased dental care, increased use of hospital and ED care, and marginal improvements in nutrition and food security.1 These recipients also show directionally positive improvements in mental and physical health, though we should interpret these effects with caution as they are not statistically significant. Compared to control participants who reported skipping needed medical care, their recipient counterparts reported:
- A 50% decrease in reportedly skipping other bills to pay for health care
- A 12% increase in the the probability of receiving any dental care in the last year
- A 43% increase in any reported hospitalizations in the last year
Across all participants, we find no effect of the cash on measures of physical health, self-reported access to health care, or health-promoting behaviors such as exercise or sleep.
Though the cash allowed some recipients to obtain more office-based and hospital care and may have led to reductions in alcohol and drug abuse, on average we do not find direct evidence of greater access to healthcare or improvements in physical and mental health. One benefit of cash is that it is flexible, and it grants recipients agency to spend in accordance with their unique needs. Yet people have a variety of needs that they may prioritize over their health out of necessity—housing, food, transportation, and childcare expenses, to name a few. For low income people especially, there are countless other demands on their time, finances, and emotional bandwidth.
The experience of one recipient, Jeremiah, illustrates the complex relationship between health and financial stability. Like a number of participants, Jeremiah faces long-standing health conditions that hinder his ability to maintain steady employment. Yet his precarious financial situation makes it nearly impossible to prioritize his health.
For Jeremiah, the cash was one piece of the puzzle—it helped him make ends meet. Yet another crucial piece of the puzzle—in this case, comprehensive health insurance and a job that offered paid sick leave—was missing. For Jeremiah and others like him, the additional $1,000 per month alone may not be sufficient to overcome the larger systemic barriers to healthcare access and reduce health disparities. Such considerations underscore how difficult it is to significantly change one’s health, especially in the span of three years. This is particularly true for people who have had limited access to medical care for extended periods and face significant health challenges. While it is possible that the effects on healthcare utilization could translate into lasting health benefits beyond this three year period, effectively reducing health disparities will likely require additional support or programs that directly target health.
The findings presented here are not exhaustive. Data collection and analyses are ongoing and we will add to these findings as our analyses progress.