Results of a Mixed-Method Experiment of Unconditional Cash Transfer and Social Support for People Experiencing Homelessness in California

Background: To the extent that lack of money and/or income is a fundamental cause of homelessness, guaranteed basic income could be a potential way to address the growing problem of homelessness in the United States. Concerns persist, however, that providing unrestricted cash transfers to people experiencing homelessness may result in increased substance use and lower rates of employment. This mixed method study examines whether a social support program augmented by cash transfer leads to reductions in homelessness and other positive outcomes among persons in Los Angeles. We hypothesize that people who receive basic income will be more likely to exit homelessness and will not have worse substance use or employment outcomes.

Methods: 760 unhoused individuals who expressed interest in a social support “phone buddy” program were enrolled in the study and were randomized to either receive the program (n=523) or be placed on a waitlist (n=237). Among those randomized to receive the social support, 256 were randomly assigned to also receive $750 a month for one year, which was not disclosed until they began participating in the social support program. All study participants, regardless of assignment, were surveyed every 3 months for 15 months and asked about housing and employment status, loneliness, and substance use. A sub-sample of 27 participants who received cash payments were qualitatively interviewed near the end of the study to ask about the impact of the social support and cash transfer program.

Results: At follow up, 31% (n=238) of the cash transfer sample exited homelessness, 25% were employed, 67% reported high levels of loneliness, and 52% reported substance use in the past month; no differences were found between groups. Convergent mixed method analyses revealed that subsidized housing programs were how most participants exited homelessness, that income payments helped cover housing transition costs, and that payments helped people remain living in their vehicles. Another mixed method confirmatory finding was the low level of employment despite participants being interested in work with some notable exceptions that demonstrated how payments can increase employment opportunities. Despite relatively high rates of substance use, there was no evidence that payments increased substance use with some examples of how payments supported recovery. The only discrepant mixed method finding was that participants across all groups reported high levels of loneliness yet those who discussed their experience of the program indicated both positive relationships with phone buddies and that payments helped facilitate connections to others, family members in particular.

Conclusion and Implications: Social support plus unconditional cash transfer is a viable policy option that can help people experiencing homelessness overcome day-to-day challenges. Further research is needed to see if larger payment amounts and/or longer duration of payments can reduce homelessness.