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95+ countries plan to send cash to citizens to make up for lost income during #COVID19. Making the most of cash = a crucial piece in the puzzle of economic recovery. Behavioral science can help people do just that

Thread based on our @WPReview piece bit.ly/2RdmUWg
For both (small) businesses and individuals, needs fall into two main buckets: 1) Keeping “afloat” for the near term (paying bills) & 2) Preparing to ramp up productivity when it’s all over (storing supplies, keeping relationships with customers warm, searching for jobs)
On average the cash relief proposed is a fraction of what people are losing in revenue/income. So they’re starting from behind - making intentional use of funds for those two (already very tough) objectives that much more critical
Yet: Science on cognitive scarcity shows that having less money reduces our ability to concentrate on tough decisions. People will need support to put aside the noise, focus on important trade-offs & build new spending habits for new circumstances bit.ly/3aPe08T
Governments have a responsibility to help recipients maximize cash without constraining choice. Our work bolstering #cashtransfers in 3 countries shows that design tweaks can help people better align their use of social assistance money w/ their own goals bit.ly/3aRUDfy
Behavioral science offers 5 strategies governments can use to strengthen cash assistance.
1) Use existing mechanisms for speedy cash delivery: Limit the need to expend mental energy negotiating the transfer by avoiding adding extra hoops to jump through. (eg reuse data collected from other programs rather than require people to supply info to prove they qualify)
2) Use labeling/messaging to promote optimal decisions: Frame how to use cash from gov’t for max. benefit, esp. for those who haven’t experienced direct economic impact yet & may not be worried abt weathering future shocks. Eg label short & long-term spending as separate buckets
3) Communicate clear rules of thumb for allocating cash: No one knows how long this will last, which makes spending decisions hard.

Some rules of thumb could help.

Eg only use the money for urgent expenses that can’t be delayed, and negotiate w/ creditors whenever possible
4) Use timing & cadence of transfers to mitigate uncertainty:

Given extreme uncertainty around the pandemic, sending smaller but more frequent transfers can make it easier for people to figure out how best to allocate cash between immediate and future needs
5) Help recipients plan and budget: For some, variable costs (commute, dining out) have decreased. For households still w/ some income to use for basic needs, messaging around making plans for using cash transfers (& goal-setting/planning devices) can help them build resilience
Read the @WPReview piece for more detail on all of these strategies, and tweet your thoughts at us! bit.ly/2RdmUWg
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