King's College London

For more than a decade, we’ve been part of research studies in the UK that have sought to improve outcomes for people experiencing disadvantage; from educational attainment, to employment, to housing and homelessness and mental health. Some of these studies have been successful, others not so much.

Although we approach things very differently from a methods perspective – one of us (Michael) is a quantitative researcher, the other qualitative (Hannah) – across studies, geographies and different jobs, we find the same patterns emerging. Perhaps more importantly, you see the same people over and over again. Whether you’re trying to get more young people into university, or prevent their involvement in violence, poverty looms large.

Almost every challenge we’ve looked at is plausibly caused by poverty and made worse by poverty. Almost every challenge also increases the likelihood of experiencing poverty, creating a vicious cycle. The symptoms of this poverty need to be treated, and interventions that take the world as it are clearly essential. But in recent years, we’ve been part of a few bold new projects that aim to address the problem closer to the root – through alleviating poverty with unconditional cash transfers. Today, we’re announcing the creation of a new “Cash Lab” in the School for Government at King’s College London, which draws together this research to try and uncover whether, and when, cash transfers work to improve outcomes.

This new lab pulls together six randomised trials we’ve conducted or are conducting around the UK, testing different kinds of cash interventions, delivered in different ways, to different groups of people. The funding for these trials comes from a variety of sources, but there is a common goal of understanding how we can best alleviate poverty.

The prize here is potentially substantial. Unconditional transfers are much easier and cheaper to administer than versions with conditionality involved, where people must be employed to monitor either eligibility, or what the money is spent on. They also have the potential benefit of giving their recipients more agency – letting them choose how best to spend the money and restoring some amount of dignity that may have been lost. Perhaps most importantly, because poverty affects so many different outcomes, transfers might achieve similarly broad impacts, making it easier to justify the expense to the taxpayer.

We shouldn’t, however, be too rose-tinted in our views. Economists are naturally sceptical of these kinds of transfers (and particularly their big sister, universal basic income), as discouraging work, and creating distortions through taxes. The evidence here is mixed – a study from the US found a reduction in employment, while a Finnish study found no effects and a Canadian study found overwhelmingly positive results. The credibility revolution in economics, which overturned a mainstream view that minimum wages caused unemployment, needs now to be turned on the use of unconditional cash.

With the complexities of tax, benefits, and other welfare systems around the world, there is a limit to how much we in the UK can learn from other jurisdictions in a concrete “will it/won’t it work” sense, although we can certainly take inspiration. This new lab will seek to find out whether transfers work, but also, where, for whom, and how. We’ve already released the findings of a first study, and more will be coming in the months and years to come – so watch this space.

Michael Sanders is Professor of Public Policy and Director of the Cash Lab at King’s. He is also Director of the School for Government at King’s and Director of the Experimental Government Team in the Policy Institute at King’s.

Hannah Piggott is a Research Fellow and Deputy Director of the Cash Lab. She is a doctoral student in the School for Government and a member of the Evidence Development and Incubation Team in the Policy Institute.