07.11.17

Financial Security as a Public Health Good: Cash Transfers Can Improve Individual and Family Health

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Neil Sircar, J.D., is an LL.M Candidate in Global Health Law at Georgetown University Law Center & the O’Neill Institute for National and Global Health Law. Any questions or comments related to this post can be directed to nrs53@georgetown.edu.

Universal Basic Income (UBI), also known as Basic Income Guarantee (BIG), has been increasingly discussed in casual conversation, periodicals, and policy-making circles at city, state, and national levels. Over the past few years pilot programs have been proposed or undertaken in multiple countries and contexts, with GiveDirectly’s Kenya project perhaps kick-starting the newfound interest in the idea. Basic income projects (and similar programs) have supporters and critics across the spectrum, fueling a vivacious debate on whether and how basic income could be implemented. The traditional liberal and conservative divide is rarely bridged as interestingly as it is when discussing welfare reform that includes cash transfers.

The Basics on Basic Income

The gist of basic income is that everyone under a certain jurisdiction receives – conditionally or unconditionally – a cash transfer. Conditional cash transfers, as seen in Brazil’s very successful Bolsa Família Program, are one way in which basic income projects are considered that essentially create a quid-pro-quo interaction between guarantors and recipients. Unconditional cash transfers (such as with GiveDirectly in Kenya) come without strings attached and the recipients can use the money as they so choose. Similar programs – the US’ Earned Income Tax Credit, negative-income tax (and its 1970s’ pilots in the US) or Alaska’s Permanent Fund dividend program – might work towards the same end and achieve positive health outcomes, though they are conceptually and structurally different. Basic income is just that, an income floor under-which no beneficiary may fall. Whether your income is $20,000 or $200,000, you are guaranteed a stipend by virtue of your residency, citizenry, and/or humanity.

Think of the Children (and Former Children)

The question asked here is: what are the health impacts, and under what conditions if any are positive health outcomes realized? The social determinants of health include (and may be dominated by) economic factors and financial security by way of ensuring or supplementing income helps enable individual and family health. The effect of financial security might be especially meaningful for children, as one longitudinal study suggests after it followed a group of study participants over 35 years from childhood through adolescence and adulthood. Of course a litany of factors might influence such a study – individual behaviors, genetic profiles, etc. – though the increased likelihood for children to be physically and mentally healthier if up-brought in financially secure households is unlikely a new phenomena. There are benefits for adults as well, leastways lower stress. Every child of the lower or middle classes (if not all income strata) can likely remember short-tempered parents worrying about bills or expenses! The long-term health effects of stress are well known and contribute to adverse health outcomes on adults as well as children.

Cash Me Ousside (?)

Conditional and unconditional cash transfers carry with them a spate of challenges, risks, and rewards. While promising, there remain valid critiques of poorly designed cash transfer programs that go beyond whether basic income would disincentivize working (it does not; like, really) or people would spend money poorly (a cynical view of humanity to be sure, and also one that is unsupported). Absolute poverty though could be curtailed and with it the negative health consequences associated with destitution; middle-class individuals and families likewise could benefit in their health from supplemental income. Financial security for all persons, and especially those in the lower income brackets, is public health good with real and potential boons to individual and family health.

            Illustration by Margaret Scott

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