Author Kat Smith
When it comes to tackling poverty and improving health, cash transfers are often seen as a straightforward solution. But do they really work? Two recent studies from the U.S. set out to answer this question—and came to some surprisingly different conclusions. So, what does this mean for Scotland’s efforts to reduce health inequalities? A new SHERU (Scottish Health Equity Research Unit) brief attempts to answer this question. Here’s a quick summary:
What did the studies involve?
Both studies focused on giving cash to people with low incomes, but they took place in different states and used different study designs:
- Massachusetts Study: Provided $400 monthly to participants for nine months. It found that recipients used more outpatient care and had fewer emergency visits, suggesting health benefits.
- Illinois and Texas Study: Offered $1,000 monthly for three years and measured a wider range of health outcomes, including healthcare use and self-reported health. It concluded that cash transfers did not significantly improve health outcomes, though they noted improvements in mental health and food security during the first year.
In short, both involved giving cash to people with low incomes and both measured health outcomes.
So, why the conflicting conclusions?
Both studies showed some short-term benefits, but they also highlighted the complexity of linking cash transfers directly to better health. For instance, while the Massachusetts study saw a reduction in emergency visits, the Illinois and Texas study actually saw an increase in emergency room use. It’s hard to know why these differences emerged; it could simply reflect differences in healthcare access between the states (more of the population in Massachusetts have healthcare access than in Texas or Illinois) or it could reflect study design or the population receiving the intervention.
Do these studies mean we need to re-think the link between poverty and health? No. Poverty's negative impact on health is well-documented, involving material, psychosocial, and structural factors. Long-term, systemic efforts to reduce poverty are still likely to yield significant health benefits in Scotland.
So, what’s the takeaway message for efforts to tackle inequalities in Scotland?
If you’re hoping for a one-size-fits-all answer, these studies aren’t going to give you one. They do suggest that simply giving people more money might not be enough to make a big dent in health inequalities—at least not in the short term. But that doesn’t mean cash transfers don’t have health and other social benefits. Instead, it points to the need for a more systemic approach. Tackling poverty—and improving health—will likely require a mix of long-term policies that go beyond just boosting income.
And while these U.S. studies offer some insights, Scotland needs its own research to really understand how income increases might impact health here. The good news is that a new international review is on the way, which should shed more light on this complex issue.
So, as Scotland continues to explore ways to reduce health inequalities, these studies remind us that there’s no quick fix. Addressing poverty and improving health is a marathon, not a sprint—and it’s going to take more than short-term boosts to people’s incomes to get us over the finish line.