Social Innovation

Helping refugees escape poverty could start with simply giving them cash

An employee counts Euro notes at the Bank of Taiwan head office in Taipei May 10, 2010. Global policymakers unleashed an emergency rescue package worth about $1 trillion to stabilise world financial markets and prevent the Greek debt crisis from destroying the euro currency. REUTERS/Pichi Chuang (TAIWAN - Tags: BUSINESS) - RTR2DOS9

Cash handouts to Syrian refugees have reaped big benefits. Image: REUTERS/Pichi Chuang

Chris Weller
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In tandem with large-scale humanitarian efforts, researchers are experimenting with a simple way to help refugees escape poverty, improve their diets, boost attendance rates at school, cut down on child labor, and empower women.

The solution: Give them cash.

In the philanthropy research community, direct cash transfers have been shown to improve people's quality of life in the developing world. Recent evidence suggests they work just as well for people fleeing war-torn countries — in both cases, people lack the financial and social security that money provides.

Despite the effectiveness of cash-transfer programs, current data shows only 6% of humanitarian spending is used for that purpose. Experts fear the approach is too often ignored at the expense of larger, more expensive programs that aren't necessarily as efficient in getting people the help they need.

A new report from the Overseas Development Institute, a UK-based think tank, analyzes the impacts of cash transfers issued by the United Nations Refugee Agency (UNCHR) to around 32,000 Syrian families living in Jordan (about a quarter of the country's refugee population). Under the program, the families received between $75 and $400 at regular intervals for one year.

The researchers found that the transfers led to many of the expected benefits: greater day-to-day wellbeing, improved financial security, and better quality of life. The report includes responses from 140 Syrians across 60 family interviews. The average respondent had been in the country for 3.5 years.

Among the findings:

- Almost all of the recipients used the money to pay rent, which approximately half said was their first priority, given rampant housing insecurity.

- The security of regular payments eased people's minds about the future — roughly one-third of recipients reported lower levels of stress.

- While the population was not representative of Jordan's refugee population, the evidence suggests cash reduced the need for "negative coping strategies," such as child labor.

- Cash transfers didn't improve employment rates and certain measures of livelihood, such as rights for women, reflecting the social and cultural limits of cash.

- Men and women used the money in roughly the same ways.

If the findings get turned into meaningful policy, the authors suggest the cash should come on a regular basis, and on time. One-time emergency transfers may be helpful in the short-term, but half of all refugees worldwide have been displaced for at least 10 years, so they need longer-term benefits.

The authors also note, however, that organizations like the UNHCR would still need to supplement cash-transfer programs with other initiatives to fill certain gaps. For example, cash likely won't help girls and women overcome the many hurdles they face in efforts to gain healthcare, education, and equality in the labor force.

A successful cash-transfer program, the new findings suggest, must involve cooperation on both sides: sweeping interventions to make safe, legal jobs easier to get, and more passive means of assistance — such as cash transfers — to ease the daily struggles of fleeing home.

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