On the original Star Trek series, when Mr. Spock was confronted with a new and unexpected bit of information, he would raise one Vulcan eyebrow and intone “fascinating.”

I don’t have a Vulcan eyebrow, but “fascinating” was my reaction to a 2013 academic paper written by Johannas Haushofer and Jeremy Shapiro, with the not-very-sexy title “Household Response to Income Changes: Evidence from an Unconditional Cash Transfer Program in Kenya.”

Stop yawning, because this is important. And fascinating.

In the U.S., lawmakers (and not just right-wing ones) have long taken a punitive approach to the poor. Even self-labeled “compassionate conservatives” like former President George W. Bush have proposed programs that would “help welfare recipients develop middle-class values.” (Because clearly, if you are poor, you must be morally defective.)  American attitudes toward the needy have their roots in 15th Century English Poor Laws that prohibited “giving alms to the sturdy beggar.”

American social welfare programs built on that model have numerous, demeaning—and costly—restrictions on eligibility. After all, if “we” don’t watch “them,” they’ll cheat us hardworking taxpayers.

Most recently, a number of state legislators have piled on; convinced that any assistance allowing recipient discretion would “obviously’ lead to imprudent choices, they have even passed rules about what welfare recipients can buy at the grocery store with their food stamps.

Imagine what would happen if we simply sent poor people some cash! (Um…perhaps like Social Security…?)

Well, it turns out we don’t have to imagine it; an NGO called “GiveDirectly” has been doing just that in Kenya. GiveDirectly chooses beneficiaries at random; the only criteria is income below poverty level. The organization is rigorously evidence-based, and the paper I came across is one of several independent research projects examining the results.

So what happened?

Recipients spent more on health and education. Alcohol and tobacco expenditures did not increase. The researchers found

no evidence for an increase in tension within households, no significant spillover effects on non-recipient households, and no general equilibrium effects at the village level, with the single exception that we observe an increase in female empowerment at the village level. Together, these findings suggest that simple cash transfers may not have the perverse effects that some policymakers feel they would have, which has led for a clear policy preference for conditional cash transfers or in-kind transfers.

I came across this article because I have recently become aware of psychological studies connecting poverty with a host of deleterious psychological consequences, and I was exploring the literature reporting on those consequences for a book I’m writing. (I had previously understood the link between insecurities of various kinds and social unrest, but I was unaware of this particular line of research.)

As an article in New America Weekly reported, the human brain has specific reactions to any form of scarcity; it seems that cognitive capacity can only be stretched so far. This has been dubbed the “bandwidth tax,” shorthand for the proposition that scarcity inhibits the brain’s ability to focus on multiple tasks. This isn’t a big surprise to anyone who has agonized over whether to use her limited funds to buy baby formula or see the pediatrician.

Interestingly, the levels of stress associated with poverty can be assessed physically; people produce a “stress hormone” called cortisol, levels of which can be measured.

Haushofer and Shapiro measured them.

Transfer recipients experience large increases in psychological well-being, and several types of transfers lead to reductions in levels of the stress hormone cortisol.

Apparently, cash transfers to desperately poor people are followed by increased access to education and medical care, and lowered levels of a stress hormone that interferes with good decision-making.



  1. Ken, can you explain how welfare penalize(s) industrious people who live with their children?

    I can’t imagine how!

  2. Ken!

    Copied below are the comments you made today that clearly show your judgemental attitude.

    Ken’s comments today:
    @7:56 –
    “No one bothers to address the issues I raise, simply because I am a conservative.”
    “Go to a suburban school and check out the $100 shoes on those kids in the free lunch line and tell me there are not problems in the system.”
    “I don’t know the cultural differences in Kenya, but I feel safe in assuming
    they exist.”
    “Please tell me you don’t think that extra money with no strings would be
    spent wisely. I stopped for coffee at a convenience store near a school the other day. There were five modest income middle school students in front of me with $10 each in chips and donuts and soda.”

    @ 11:44
    “Look at all of the hate-filled bile. Ken is a rich entitled bigot who wants the poor and elderly to suffer. Being critical of any aspect of the welfare system makes me a greedy bastard…(I got mine, so leave me alone)?”
    “Three of those 5 students were my own students so I know their financial situation and I know the difference between knock offs and genuine Jordan’s.”

    “I am not judging anyone who is on any form of public assistance but I am judging a system that punishes hard work.”
    “Are you seriously not interested in any oversight and counseling regarding financial management for people getting such assistance? I do not indulge in such “luxuries” unless you count my $1.39 cup of coffee (which I know some could not afford). The reason I know what the items cost is because they were checking out in front of me.”

    “With all due respect, I am not the one with the reading or memory problem. ”
    “I responded to this post because I have no confidence that money offered to people with poverty level incomes would be spent as prudently as was the case in Kenya.”
    “I wonder when I see the exorbitant expenses incurred by some (Shoes and expensive non-nutricious junk food) if some sort of financial guidance is not in order.”
    “You don’t know me but because I do not share your progressive views, I am no doubt a despicable person.”

    1. You passed judgement on the kids in the lunch line and the kids at the convenience store.
    2. You passed judgement on other commenters on this blog for not instantly responding to the other parts of your first post.
    3. You passed judgement on me and everyone else that called you out for your judgemental comments.
    4. You put words in my mouth and in the mouths of other commenters on this blog.
    5. The final words that you put in my mouth – You claimed that I don’t know you but since you don’t share my progressive views that I have decided you are a despicable person.

    You started your final comment by saying that you are not the one with the reading or memory problem! ( clearly directed at me) Really Ken? Really?

    It appears that you are truly incapable of recognizing how judgemental your comments actually are.

    Just because I didn’t speak of improvements that could be made within our social support system doesn’t mean that I agree with everything. Again, don’t put words in my mouth or assume what my thoughts are.

  3. Pete! The minute a welfare recipient earns any money, they lose more benefits than the income they gain. Many who would gladly seek employment cannot afford the benefits they would lose. That defines penalties to industrious people. If a man marries the mother of his children, again the mother loses benefits. Sounds like discouraging responsible fathers to me.

  4. Some of you (maybe most of you) hear judgement of people in my posts. And yet my criticism is only of the failings of the welfare system and those who think the only problem is insufficient spending. If that is not you, a thousand pardons. To those who I have offended, my apologies. I assure you that I don’t just get my information from biased sources.

  5. Let’s see, what’s the evidence that what you’ve been told to believe is true? Surely you can post some state law or actual report that what you believe is true. Give it a try.

  6. A few observations:

    Achieving middle class status can free a person to devote more time to being charitable with both time and money. Or, this was true before it began to take more than one job to get up there and stay there.

    In the same way that making reasonable use of the current USA medical system takes agressive literacy and advocacy, surviving poverty requires personal resources and time that are only infrequently, very infrequently, available.

    Of course buying whole chicken is a preferred market choice – if you have – a functioning stove, any decent, or any, pots and pans, staples to use in preparing something tasty, and, of course both time and knowledge about how best to prepare your intended dish, not to mention an appropriate way to store leftovers…

    If your entire day is a discouraging march of crisis or near crisis decisions about almost every aspect of your life, filling your children’s tummies, even with what the more fortunate term (scathingly) junk food means a decision made and a problem solved. Your ‘event horizon’ is likely not the 20 years in the future when your kid has diabetes, but the few hours in the more immediate future when you have again to solve the crisis of how to fill those tummies.

    And, don’t forget how tired you probably are…and how bad you probably feel that you can’t do better than you are for your babies – afterall, you do have a TV.

    Maybe conservatives who blame the poor really ought to deny them TV…and Internet…through which they are doing the best they can at educating themselves, as we do know that the education system is failing them (they know it too).

    So…useful approaches to the issue of preparing good food may lie in community kitchens and community gardens.

    Personally, I have always preferred the idea of letting the Unemployment Ski Team live under a bridge and have their small money (and therefore a portion of my taxes) if that would keep their apparently lazy, shiftless, also apparently less than clean, selves out of my workplace and my (of course very clean) hair.

    Never forget there is always a jerk and if you look for a ski bum, or a welfare abuser, a dodgy politician, *you can probably find one. The exception does prove the rule (I think I have that correct) because these individuals are the exception. *Right now, sadly, I don’t think we can sensibly maintain that jerk politicians are the exception.

    The idea that more money won’t help is (for me) one of the worst nastily superior, completely uninformed comments we fortunate few can make. Visit a school in a poverty area: investigate -do they have – working toilets, doors on the stalls, well tended (needle free) playing fields, functioning libraries, et alia. Compare to schools in wealthy neighborhoods. And, charter schools are NOT the answer – public education is one of those common goods that we ought to recognize our good lives depend on and it is not a business and competition is not a helpful approach in r elation to education.

    May the holier than thou pinch penny nay sayers and the rest be condemned to be cared for as old folks by the youth whose prospects have been destroyed by these ungenerous, self serving attitudes…And I have descended into ranting. Time to exit. Thank you all for your patience.

  7. Poverty rate since 1972 (through 2014) has ranged from 11.1% to 15.2%. source: US Census bureau

  8. Ken, welfare doesn’t eliminate poverty which is a function of business and education, not government. Welfare reduces starvation and/or crime.

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