What happens when you just give money to poor people?
To see whether this was actually happening, researchers did an actual experiment. They surveyed people in Kenya who received money from GiveDirectly, and a similar group of people who didn’t get money.
The results from the study are encouraging, says Johannes Haushofer, an economist at MIT’s Poverty Action Lab who was one of the study’s co-authors.
“We don’t see people spending money on alcohol and tobacco,” he says. “Instead we see them investing in their kids education, we see them investing in health care. They buy more and better food.”
People used the money to buy cows and start businesses. Their kids went hungry less often.