The People’s Republic of China has created the largest unconditional cash transfer program in the world. It is called dibao, meaning Minimum Livelihood Guarantee. A recently published book is taking a fresh look at how effective dibao is at improving the livelihoods of impoverished Chinese people.
Dr. Qin Gao is on the faculty of the Columbia University School of Social Work, where she researches poverty, income inequality, and social welfare programs in China.
Gao has done extensive work researching dibao, and has released the book “Welfare, Work, and Poverty: Social Assistance in China,” which evaluates how well dibao has achieved its goals of lowering the amount and intensity of poverty in China.
The UBI Podcast recently interviewed Gao on her new book about the dibao program and asked her to give her thoughts on universalizing dibao.
Dibao is important to understand for basic income researchers because it demonstrates on a large-scale how basic income operates when it is not universal (since it includes a means test).
The dibao program allows each locality to set its own dibao standard (essentially the poverty line). Anyone below that standard is technically eligible for dibao assistance. The assistance in theory gives an individual enough money to reach the dibao standard. Eligibility for dibao is based on individual income, so one individual in a household could qualify, while another may not, Gao said.
For example, a dibao standard in Beijing, China is 900 RMB per person per month. If an individual made 700 RMB per month, dibao would provide 200 RMB in assistance to reach the dibao line of 900.
While some may worry that officials will cut off dibao assistance once an individual goes over the line, Gao said the reality is more complicated.
“In reality, many local officials are very considerate of the fluctuation in people’s incomes and other family situations. For example, education needs, health care needs. So many localities actually have initiatives to not discontinue people’s dibao benefits right away if they have income that’s higher than the local dibao line,” she said.
Some localities may allow a family to stay on dibao for three months after extra income is earned to make sure they have job security and they “do not fall back into poverty right away.”
Once a family receives the cash, it is unconditional, meaning there are no (direct) behavioral conditions to continue receiving the money.
Gao said the evidence that dibao creates a poverty trap, where families remain under the poverty line intentionally to receive assistance, is not strong.
Some localities have families update their income and wealth information every three to six months. Certain villages will even publish the names of recipients to allow for public feedback on whether a family should qualify for dibao. Based on the feedback, localities will randomly select people to verify their income information.
“So it’s a very systematic and stringent process,” Gao said.
For some villages, allowing others to comment on a family’s poverty situation may further stigmatize the dibao and other forms of welfare.
“Because the dibao is an unconditional cash transfer, so by design the policy requires applicants to tell the truth and other community members and neighbors to share the responsibility of monitoring. That is part of the design of this program,” Gao said.
While on paper, the dibao is technically an “unconditional cash transfer,” the way dibao measures wealth creates its own form of conditions.
Depending on the locality, dibao recipients may face a myriad of asset tests that prevent them from owning pets, a larger than average home, a car, or luxury items. Expensive private schools and schools abroad are off-limits. In the past, even a cellphone was a disqualifier.
“I think now, many localities are more lenient on that, especially on the cell phone. But there are certain luxury goods (so-called), that you’re not supposed to have. That also features into the feedback from the neighbors and community members. They would get critical and jealous if you have certain luxury goods that they don’t have but you are getting dibao,” Gao said.
In Gao’s book, she also analyzes the subjective well-being and social participation of dibao recipients. She found dibao recipients “tend to be more isolated, and less active in their social participation” than similar peers.
Dibao recipients may feel stigmatized from participating in these activities, such as going to the movies, since it is not a “culturally acceptable use of the dibao income,” she said.
After China’s transition from a planned economy to a market-based economy, society’s expectations about how families earn their own living changed. Now it is expected that people “earn a living through their own work.” Although, Gao said China is currently going through a debate about who “deserves” welfare.
“Previously people had guaranteed jobs, but many people during the economic transformation were laid off so able-bodied adults couldn’t support themselves through jobs anymore. And that group is making up about half of the dibao population,” Gao said.
One area of concern for policymakers is ensuring the dibao is reaching the “proper recipients;” that is people in poverty. There are reports of targeting errors in administering dibao “because of misreporting or difficulty to capture the real income or assets situation in rural areas.”
“The targeting error is real and local officials are very aware of it, but that will stay with the program because of the variations of family conditions and income,” Gao said.
The dibao standard is often used as a criteria for other welfare as well. This means that qualifying for dibao also gives a family access to a host of other assistance (including education, housing, and medical assistance). However, this could create a “welfare cliff” issue, where if a family exceeds the standard they may lose a lot more assistance than they gain as income.
“I think this is one of the policy design features of dibao that needs to be revised right now,” Gao said of dibao acting as a “gatekeeper” for other social assistance.
Overall, dibao has only reduced the rate of poverty to a “modest degree.” It is more effective at reducing the depth and severity of poverty, Gao said.
When asked about the potential to universalize dibao and remove the means-test, effectively creating a Universal Basic Income for China, Gao said this idea has been “very much on my mind recently.”
“I think the best possibility probably would be for certain more developed localities to experiment with such a program and see how it works,” she said.
As for creating a UBI program in China in the near-term, Gao said this would be challenging for many reasons.
“To make the dibao or a similar cash transfer universal all around China, I don’t think it’s very likely in the short-term, both in terms of fiscal challenges and also political and cultural challenges,” Gao said.
The greatest challenge of this generation is managing both environmental sustainability and a growing human population. Climate change and income inequality are making this an increasingly difficult prospect.
The Sufficiency4Sustainability Network (S4SN) is working on analyzing the intersection of these issues and the solutions that can address them.
S4SN is led by Peter Knight, a former lead economist at the World Bank. The network of researchers analyzes different policies and how they may interact with ecological and economic trends. Knight recently joined the UBI Podcast to discuss his work with S4SN.
“We’re exploring how changing values and policies might result in lower resource use by the relatively well-off, while raising the consumption of the poor to a level sufficient to meet their basic human needs on a planet with limited resources and moving toward a population of 11 billion by the end of the century,” Knight said.
The network is interested in researching Universal Basic Income (UBI), and it is included as one of the main research topics of S4SN.
“It seems to me that Universal Basic Income is right on this issue of what are the technological trends that’s going to make this important for not only economic sustainability but social, political, and ecological sustainability,” he said.
UBI is of interest to Knight because he thinks it may be an important solution to address the upcoming dramatic shifts in employment due to technology.
“I think the exponential rates of change involved in Artificial Intelligence and all those technologies that are related to Moore’s Law and their speed and cost of computation, jobs are going to be destroyed faster than they can be replaced, so UBI is a method of separating work and paid remuneration from enough to live on,” Knight said.
While Artificial Intelligence has the potential to help solve many of the problems facing humanity, Knight said, the problems it creates means that it must be coupled with a UBI.
“Exponential technologies including artificial intelligence offer potential substitutes for the limited resources, provide cleaner energy, and reduce the need for physical labor. But they also tend to concentrate income and wealth, so UBI is necessary to provide economic, social, and political sustainability,” Knight said.
For Knight, it is important to consider that the sacrifices made for environmental sustainability should not be made by the poorest among in society.
“You just can’t tell people that are starving, ‘look you’ve got to cut back your consumption. If you want their support for broader changes, you need to both change values and provide enough income to live for people who are increasingly not just manual labor, agricultural labor, industrial, but increasingly the white-collar professions are going to be displaced,” Knight said.
Students from across Taiwan have assembled for the first UBI Taiwan Summer Fellowship. The group is studying and researching Universal Basic Income (UBI) this summer, with the goal of producing a national basic income proposal by September.
The summer fellows met for the first time mid July to be trained in communicating basic income with those that have never been introduced to the idea. The fellows have developed a comprehensive strategy to promote and research UBI in Taiwan.
There are over 30 students from universities across Taiwan participating in either communications or research focused tasks.
“The summer seminar is bringing together both theoretical and practical considerations as a way of creating positive public policy for people,” said Julio Linares, a recent graduate of National Chengchi University (NCCU). Linares, originally from Guatemala, is helping to lead the research team and the seminar.
The fellows are producing a UBI white paper, which is scheduled to be completed by late August, to outline how Taiwan could implement UBI nationally. UBI Taiwan is planning to introduce the policy proposals to Taiwanese policymakers. They are also considering how to create a framework for a basic income pilot program experiment in Taiwan.
Within the fellowship are different teams focused on specific projects, such as social media and news production.
Dongyan Wu, also a NCCU student, is leading the news team for the summer fellowship. Wu said he believes UBI has the potential to transform Taiwan.
“If UBI is successful in Taiwan, everything we do, all our jobs and all the activities, will finally have meaning,” Wu said.
Tyler Prochazka, the fellowship director, started preparing the seminars and recruitment four months ago. Fellows were chosen from nearly 100 applicants based on their skill set and interest in understanding UBI.
Toru Yamamori, Cheng Furui, and Sarath Davala are scheduled to give presentations to the fellows in the coming weeks on various topics related to basic income. Enno Schmidt, the Swiss referendum leader, gave a presentation to the fellows last week.
Ping Xu, the coordinator for UBI Taiwan, said the summer fellowship is part of building up “the kind of future we want to see” in Taiwan.
James Davis, a rising senior from Columbia University in New York, flew to Taiwan for two months to help lead the summer seminar and oversee research for UBI Taiwan. Davis is the director of field research, which is producing the pilot program framework.
“UBI Taiwan’s mission is critical for the future of work in Taiwan. I have really enjoyed getting to know the volunteers, learning about their backgrounds, and sharing their passion for helping others,” Davis said.
Chris Lee, a Democratic state representative from Hawaii, made international headlines when he passed legislation creating a working group to study Universal Basic Income.
Lee recently joined the UBI Podcast to discuss the legislation.
He said the working group will analyze Hawaii’s exposure to automation and the potential for solutions, such as basic income, to address this issue. The working group will also look at the efficacy of Hawaii’s current social services system and whether it is adequate for the challenges of the future.
“It’s safe to say, that if we do nothing…these programs that we are already spending money on are going to go through the roof. To say nothing of unemployment and other changes in the economy that is going to exacerbate income inequality and limit the opportunity for people to work and make a living,” Lee said.
There is no end-date to the working group, and Lee said the key players will likely be organized by the end of this summer. Lee said he hopes that by the next legislative session in January the working group will have produced enough research to push for funding for deeper research into evaluating various proposals.
A potential outcome of the working group is to create a pilot program that is “not necessarily administered by the state,” but is tailored to the local economy, he said.
While the United States had a debate over basic income during the Nixon Administration, Lee said he hopes that initiatives like this working group can bring the discussion to a new generation.
“I think this is definitely an inflection point where we have to acknowledge that the challenges that face us are far larger than our existing infrastructure and economic system is equipped to deal with,” Lee said.
Lee said there must be some changes in the system.
“I think that ultimately we have no choice and it is inevitable that we see some sort of paradigm shift in the way we are doing things,” he said.
The legislation passed unanimously, and Lee said he has not encountered opposition to the proposal. The legislation had support from labor unions, the business community, social justice advocates, and regular Hawaiians.
There were even a handful of legislators Lee worked with on the working group that already had exposure to basic income previously, he said.
“I think that respect for one’s neighbor, that ‘aloha spirit’ is something that drives our value set so that when we come together and say that everybody should have the right to basic financial security — that’s something I think is meaningful to people. So I think everybody has at least been open to the idea of having this discussion and seeing where it will go,” Lee said.
How do we facilitate human connection in a world where most jobs are automated? That is the question asked by a new video inspired by Dr. Michael Laitman. Many experts are discussing Universal Basic Income as a way to address technological unemployment, but is this enough? Are there other mechanisms to facilitate the human experience?
From the description:
“Malls are collapsing as drones take to the air. Tens of thousands of employees are being fired as automated supermarkets take shape. Autonomous cars are threatening drivers. Artificial intelligence is spreading through the service sector. 3D printers are redefining manufacturing. And talking smartphones are becoming personal secretaries. The jobs of the future are unclear. And everyone’s playing with the idea of a universal basic income. But with it, a profound question arises, what will be the role of the human being in the near future? And where are we going as a society?”
