Evaluating the Effectiveness of Emergency Financial Assistance Delivery in Texas

Low-income individuals often struggle to pay their bills and such challenges have been heightened during the ongoing COVID pandemic. The inability to pay rent or utility or cover unanticipated costs can create a spiral of financial insecurity and economic instability. This project investigates the impact of a one-time receipt of emergency financial assistance on a variety of household level outcomes. The issue of emergency financial assistance raises two immediate questions. First, does a one-time EFA payment to a person or family in need have a meaningful, persistent effect on measures of economic security, or does it merely delay a negative outcome such as homelessness or sizable debt? Second, does in-kind assistance in the form of payment to a third-party vendor more reliably help the individual avoid financial insecurity than unrestricted cash paid directly to the individual themself? We plan to implement a randomized controlled trial (RCT) to address both of these questions. The answers are of academic and policy interest to the issue of optimal transfer program design. They are also of immediate practical interest to non-profit organizations that provide financial assistance to low-income individuals.