Village women. Credit to: Andrew Renneisen for The New York Times
GiveDirectly, a New York-based nonprofit, which activity has been covered in Basic Income News before, has initiated a pilot program in a rural village in Western Kenya, this past October. The organization recently published an internal analysis of the pilot program, in a first attempt to process the results of a GiveDirectly basic income project. The results will set the tone for future programs and influence basic income policy making moving forward.
The Pilot Program
The cash transfers are made via mobile phone to the village residents. Each of the 95 participants received 2,280 shillings (about US$22) every month to save or spend however they see fit. Participants are all guaranteed this income for the next 12 years. Before GiveDirectly began the payments, many people in the village were living on less than US$0.75 a day; afterwards, no one was. GiveDirectly’s analysis claimed that “for 45% of the village’s residents, the first month’s basic income payment was the largest amount of money they’d ever had.”
The organization recently published the qualitative results of the first study of the pilot program. The research was conducted through follow-up call center-based phone surveys, as well as small focus group conversations. The survey asked about the biggest difference the money has made in their lives. Some of their answers are below:
- “I will be getting transfers that will enable me to pay medical bills for my condition and also buy other things. Since I went for checkup after receiving the transfer, my health situation has improved and I am able to go about my business without much stress.” Grace, 68.
- “Since I have been able to improve on my business, I have gotten income to help me meet my daily expenses and also buy enough food for my children.” Diana, 33.
- “The biggest difference in my daily life is that I can have 3 meals in a day.” Dorcus, 87.
The survey also asked how the money was spent.
- “I spent the entire transfer received from GiveDirectly to purchase a fishing net and a floater.” Erick, 40.
- “I spent the money received from GiveDirectly to buy clean water, food, soap, and used most of the amount to pay school fees.” Fredrick, 70.
- “I spent most of the money I received from GiveDirectly on buying a goat since I want to buy livestock. I also bought food for my household.” Patrick, 38.
- “I spent the money received from GiveDirectly to purchase food and kept most of the transfer as savings.” Milka, 44.
Do recipients of basic income stop working? This question has been at the center of the basic income debate despite much of the evidence indicating that recipients don’t stop working, and don’t spend money on alcohol. Here are some of their responses:
- “I feel I need to work harder and engage in other income-generating activities to get more money.” Samson, 70.
- Yes, receiving the payments has changed my feeling towards work since I really want to finish my driving course and immediately look for employment.” Fredrick Odhiambo Awino, 28.
- “I will not be working since I am old and sickly. I will just wait for the transfers.” Jael, 73.
- “I will still continue with my small business and charcoal burning since the family needs the extra income to enable us to meet all our expenses without borrowing from relatives each time.” Norah, 30.
Another survey question asked about how the money will affect recipients’ decisions or attitudes around entrepreneurship or other risk taking, like migrating to look for work. GiveDirectly stated that “So far, seven recipients have indicated that they had plans to or had left the village to look for some form of work. On entrepreneurship, some recipients plan to use the cash transfers to expand existing businesses or start new ones, while others think they haven’t received enough money to start anything meaningful.”
- “There is a time I was selling maize, buying and selling but it collapsed but for now I know I will revive it because during that time we had a drought and so we consumed the maize.” Mixed gender focus group respondent.
- “I want to start a small ‘omena’ (small fish) business.” Caroline, 28.
- “I want to start a second-hand clothes selling business.” Millicent, 33.
- “Personally, I desire to start a business but it’s not easy to start one here. For example, if we do the same business, it gets difficult to get customers. We have to fight for the few that are available. We are not able to do business in far places. If you start one you can only do it within the village next to your house. Getting the capital is also difficult but we would wish to start businesses.” Women’s focus group respondent.
Another question was whether recipients would pool some of their money toward shared projects like building a well or repairing roads. GiveDirectly’s analysis said, “when we first explained the program, one of the community leaders suggested this at the village meeting, and it’s obviously on people’s minds, but we haven’t yet seen any large projects launched as a result.” This question is especially salient because not everyone in the village is receiving the basic income grant. In a New York Times article about this pilot program, Annie Lowry noted that this has been a source of tension in the village: “by giving money to some but not all, the organization had unwittingly strained the social fabric of some of these tight-knit tribal communities.” However, community projects that benefit everyone could ease this tension. One of the focus group respondents indicated that such projects are certain in the future:
- “We just started receiving this cash just the other day and after doing a few things with it in the house here, we can think of coming together as a village and we agree that we pool some cash together that we can use to do something, at the moment we have not started, but we will.”
GiveDirectly widely considers these results to be encouraging. It plans to continue fundraising to expand the number of recipients, and launch a full study later this year. This pilot is part of a larger plan in Kenya to offer similar unconditional transfers to people in 200 villages.
More information at:
Annie Lowry, “The future of not working”, The New York Times, February 23rd 2017
Catherine Cheney, “Early insights from the first field test of universal basic income”, Devex, February 27th 2017
David Evans, “Do the Poor Waste Transfers on Booze and Cigarettes? No”, The World Bank, May 27th 2014
Joe Huston and Caroline Teti, “What it’s like to receive a basic income”, GiveDirectly, February 23rd 2017
Kate McFarland, “US / KENYA: Charity GiveDirectly announces initial basic income pilot study”, Basic Income News, September 25th 2016