by Daniele Fabbri | Jan 1, 2019 | Research
Credit Picture to: The Open University
A new paper, “Myth-Busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa”, based upon evidence collected in eight Sub-Saharan Africa (SSA) over a decade, presents evidence in favor of Unconditional Cash Transfers (UTCs) in Low and Middle Income Countries (LMICs).
Using experimental and quasi-experimental evaluations of large scale UTCs in SSA, conducted in collaboration with the Transfer Project, which sees the participation of UNICEF, FAO, The University of North Carolina, national governments and local research partners, the paper collects evidence regarding six common misconceptions about UTCs and refutes them: 1) UTCs induce higher spending on alcohol or tobacco; 2) UTCs are fully consumed (rather than invested); 3) UTCs create dependency (reduce participation in productive work); 4) UTCs targeted to households with young children increase fertility; 5) UTCs lead to negative community-level economic impacts (including price distortion and inflation); 6) UTCs are fiscally unsustainable.
1) UTCs induce higher spending on alcohol or tobacco
A common argument against UTCs is that they would lead to spending on superfluous goods, as alcohol, tobacco, or drugs, which are sometimes called “compensatory bads”.
The argument is largely based upon anecdotal evidence, spurring from the fear that cash would be administered improperly and wasted, and would lead to the prioritization of in-kind transfers. The paper found that as the household expenditure allocated on food and other items increased, spending on alcohol and tobacco didn’t.
2) UTCs are fully consumed (rather than invested)
Being transfers unconditional, the fear may arise that they are immediately consumed, and that they do not stimulate longer term planning and investment in productive activities and human capital.
Noticing that the cash transfers were administered in locations where the populations is well below the poverty line, it shouldn’t come as a surprise that much of the transfer is used to cover basic needs, which in turns ensures the maintenance and a form of stimulus to human capital development.
Even as the role of direct expenditure is substantial, the paper finds that UTCs have positive effects on the productivity indicators chosen as representative of investments, stimulating crop and livestock activities.
3) UTCs create dependency (reduce participation in productive work)
A common perception that is based upon the longstanding discourse on welfare dependency, fears that gave birth to the concept of workfare in the sixties and that grew under Reaganism and Thatcherism.
The idea is that poor families receiving cash transfers would become lazy and lose the incentive to work, when it isn’t laziness in the first place to create poverty. The allegations of welfare dependency thus stem from a sort of moral high ground, the implication being that poverty is somehow “deserved” and that the poor are not willing to work in order to better their condition once they receive the transfer.
We have seen formerly that UTCs influence investments, it is thus certain that they do affect household decision making in labor allocation, i.e. how receivers participate to the labor market; but labor force participation rate as exemplified by the chosen indicators showed no significant impact of transfers on labor supply.
4) UTCs targeted to households with young children increase fertility
Policymakers often sustain that Cash Transfers conditional to motherhood and having young children will have the unintended effect of increasing fertility rates.
The concern is even more severe for SSA, the last region to start experiencing the demographic transition.
Given that Conditional Cash Transfers (CCT) are the instrument of choice to foster higher fertility rates in OECD countries, the implications for their application look unavoidable; nonetheless the study found no instance in which a government UCTs increased fertility in SSA. Rather, the evidence suggests that UTCs have in some instances increased birth spacing and delayed pregnancies among young women.
5) UTCs lead to negative community-level economic impacts (including price distortion and inflation)
This fear stems from the idea that isolated cash injections would have a one-sided effect and only stimulate the demand side, whilst having no impact on the supply side. This would lead to detrimental effects, namely price distortion and inflation, devaluating the transfer and affecting also non-beneficiaries, which would find themselves facing higher prices.
The study found no evidence of inflationary effects, which can be explained by three factors: the relatively small share of UTCs beneficiaries (20% of the households); the sum of the transfer, which while substantial for the poor recipient it’s just a tiny proportion of the total cash flow of the community; the supply side is elastic, and there is enough market inter-connectivity for production to match increases in demand.
Theory suggests that UTC could be used to overcome market failures, functioning as a stimulus to pro-poor productivity and having net positive impact on local economies. Positive spillovers should manifest and affect non-beneficiaries, as a result of the stimulus to aggregate demand.
Local economy simulations indicate that UTCs generates positive effects on the local economy, with every dollar injected in the economy via the transfer causing nominal multiplier effects ranging from 1.27 in Malawi to 2.52 in Ethiopia.
6) UTCs are fiscally unsustainable
Once UTCs end their experimentation phase and are institutionalized, there is diffused concern that the administrative costs are too high. The fear is that the medium or long-term maintenance of the programs is fiscally unsustainable, and supposedly high administrative costs have been cited as one of the main reasons for not adopting UTCs.
The cost-transfer ratio (CTR) is the indicator generally used to measure the cost-efficiency of the programs. The CTR depends largely on the time at which it is measured; at the beginning of the programs there are large, fixed, start-up costs which weigh heavily on the ratio, representing a large part of the total costs in the first period. The start-up costs combine with the lack of economies of scale, which require times to be attained.
Using estimates of the CTRs for the programs of the Transfer Project, accounting for the scale-up effects and correcting for the start-up, lump sum costs, the study found that cash transfers at scale as a percentage of current spending and GDP are feasible and fully within the cost considerations of any national government. The expenditure for UTCs as a percentage of general government expenditures would have an average of 4.4 percent across countries, but could decrease of the 37% if the program was limited to the rural areas.
“…we have drawn on cross-country evaluation data to summarize evidence on six common perceptions that we believe hold back political acceptance of such programs. While the political context is such that these perceptions will need to be tested in each specific program in order to be fully internalized, we hope that the growing body of evidence, including that presented inthis paper, will permit more evidence-based rather than ideologically-based debates around cash transfers in LMICs”
More information at:
Sudhanshu Handa, Silvio Daidone, Amber Peterman, Benjamin Davis, Audrey Pereira, Tia Palermo, Jennifer Yablonski, “Myth-Busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa“, The World Bank Research Observer, Volume 33, Issue 2, 1 August 2018, Pages 259–298
by Leah Hamilton | Dec 21, 2018 | Research
Maximilian Kasy.
A new working paper released by Growthpolicy, which disseminates research by Harvard scholars on the topics of economic growth, employment, and inequality, argues that a universal basic income is superior to current low wage subsidies in several ways. The author, Associate Professor of Economics at Harvard, Dr. Maximilian Kasy contends that these subsidies, specifically the Earned Income Tax Credit (EITC) in the United States, comparatively carries several economic, moral, and political disadvantages.
The EITC is a subsidy to low income working families and increases with income to specific thresholds, depending on household size. The credit has been found to incentivize work, reduce welfare dependency, improve child health and educational outcomes, and lifts roughly 6.5 million people above the official poverty line. Kasy argues that a basic income could produce similar outcomes while eliminating several important drawbacks. First, because the demand for labor is finite, especially in times of recession, incentivizing some workers to work more, which ultimately creates fewer jobs overall. In other words, if a service sector employee works overtime hours in order to maximize the EITC credit, her employer will not need to hire an additional employee to cover those hours. Further, multiple researchers have found that subsidizing low wage work via the EITC plus cuts to traditional welfare, in the 1990s, decreased pressure on employers to offer a living wage and ultimately contributed to the declining value of the minimum wage. In essence, Kasy argues, the EITC is a subsidy to employers. Conversely, a UBI would increase the bargaining power of workers and wages would thusly rise.
Dr. Kasey also asserts that a basic income would reduce the coercive power that employers, abusive partners, and a paternalistic welfare system hold over economically marginalized populations. Low wage workers, survivors of domestic violence, and mothers at the mercy of intrusive welfare policy would have an increased ability to walk away from exploitative situations. Furthermore, a basic income would fairly compensate child and elder care work, which is largely done by women and goes unrewarded in our current wage-based system.
Finally, as many have argued, Dr. Kasey finds that a universal basic income carries potentially greater political stability than means-tested benefits. For example, while the passage of Social Security in the 1930s and Medicare in the 1960s was met with cries of “Socialism!,”, these were soon widely popular across the political spectrum and are rarely considered as potential areas for federal budget cuts.
More information at:
Maximilian Kasy, “Why a Universal Basic Income Is Better Than Subsidies of Low-Wage Work”, Working paper, August 5th, 2018
by Daniele Fabbri | Nov 23, 2018 | Research
Photo Credit: CC(Cindy Woods)
The last world development report from the World Bank is out. It investigates the changing nature of work and suggests what governments could and should do to address the phenomenon. Among the proposals there is the enhancement of social protection, to a degree disjoining it from formal wage employment, considering Universal Basic Income (UBI) as one of the options.
Digital transformation allows firm to grow rapidly, escaping the traditional patterns of production, and the rise of digital platforms make people more susceptible to the effects of technological change. The landscape of work is evolving and the skills required by employers around the world are changing: skills such as complex problem solving, adaptability and teamwork as central requisites. This in turn modifies how and at which terms people work, and short-term work is on the rise, bringing challenges to the existing welfare state, the report says. The World Development Report goes on suggesting three solutions governments should put into practice: investing in human capital, through the guidance provided by the Human Capital Project; enhancing social protection; and increasing revenue mobilization as a mean of financing the two aforementioned solutions.
The changing nature of work
Fears of technological based unemployment have their roots in history, spanning from the introduction of knitting machines in England in the XVI° century, to the Luddites distruction of textile machinery in the 19th century, but the overall effect of industrialization was to stimulate economic growth and to raise the living standards. This fear is also contemporary, supported by the trend of declining industrial employment in high-income economies in the last two decades. The Republic of Korea, Singapore, Spain, and the UK are among the countries in which it dropped by more than 10 percentage points but, on the other hand, millions of industrial jobs have been created in developing countries since the late 1980s.
Technology is disrupting, unevenly, the demand for skills, and its potential for the amelioration of living standards manifests heterogeneously: workers in elected sectors gains from technological progress, whilst others see themselves left facing displacement. The wealth created by the platform economy is huge, but its placed in the hands of a few, and A.I. raises concerns about the advent of a jobless economy following the rapid growth in the number of robots operating worldwide: if they are 1.2 millions in 2018, they will be 2.6 millions in 2019, an increase of 1.4 milion units in just one year. It should be noticed how, in the countries with higher robot density – Germany, Korea, Singapore – employment rates remain high, but in Germany the effect was a reduction in the hiring of new, young entrants; young workers, and economies anticipating larger numbers of entrants, may be more affected than others.
The extent to which robots replace workers remains unclear, with automation of routine work estimated to have also created 23 million jobs across Europe starting in 1999, and evidence suggesting that its overall effect is that of raising demand for labor, specifically in the technology sector, by providing the tools necessary for online work, or for taking part in the gig economy. It’s sure that jobs based upon repetition, which are “codifiable”, are those more endangered by automation, but estimates of the number of jobs at risk varies widely, for the US from 7% to 47%, the latter figure the result of automation probabilities developed by machine learning experts at the University of Oxford, a speculation which cannot account properly for the rates of technology absorption, which have been observed to vary greatly depending on the kind of technology, both internationally and intranationally.
The effect of automation on skills demand and on the production process is somehow more discernable. On the skills side, the demand for cognitive abilities which allow workers to be more adaptable, as critical thinking and socio-behavioural skills, is increasing; on the side of the production process there is the rise of global value chains, the changing nature of the boundaries of firms, and the fluid geography of jobs. The process has favored the more educated, and human capital seems the more effective protection against automation driven unemployment: “A big question is whether workers displaced by automation will have the required skills for new jobs created by innovation”. Innovation has the greatest impact on low and middle-skilled workers, either because they are more suceptible to automation, or because no complementarities with technology (human-machine cooperation) manifest.
The paper identifies how technology has disrupted the demand for skills: firstly, the demand for non-routine skills (i.e. cognitive and socio-behavioural) is increasing both in advanced and emerging economies; secondly, the demand for job specific-skills is declining; thirdly, payoffs to combination of different type of skills, allowing for greater adaptability and easier transfer among different jobs, appear to be increasing. The risk is growing inequality, as the report states:
“In advanced economies, employment has been growing fastest in high-skill cognitive occupations and low-skill occupations that require dexterity. By contrast, employment has shifted away from middle-skill occupations such as machine operators. This is one of the factors that may translate into rising inequality in advanced economies. Both middle- and low-skill workers could see falling wages ⎯ the former because of automation; the latter because of increased competition.”
Technology changes the way in which people works and the term under which they work. The gig-economy and jobs based on on-demand services, arising in an environment created by the advance of technology, don’t rely on long-term contracts but rather on extreme flexibility. There is a minimum productivity level at which firm find it optimal to employ workers formally before resorting to globalization, this means that informality is prefereable for everyone exept for the most productive workers.
If globalization and automation were to act simultaneusly, increasing the productivity of workers, the number of informal workers may decline, but if more requirements –minimum wage, required benefits – are imposed on firms, the positive “formal employment effect” may be reversed, and informality actually rise. The management of risk through employers doesn’t fit well with the new nature of jobs, and the use of payroll taxes to finance pensions and social insurance may no longer be sustainable, even for advanced economies, as the percentage of the workforce taking part into the formal economy decreases. Indeed, the changing nature of work stimulates informality, as taxation, ragulation, and social protection schemes don’t provide businesses with incentives to grow, particularly in developing economies. The issue is present in both emerging and advanced economies, and convergence is occurring among them, with increased informality in the advanced ones, leaving workers without access to benefits or protections and making the case for direct intervention of the government through benefit provision. “If automation pushes up the cost of distorting labor markets, and development improves the efficacy of the public sector, government should move away from regulation-based redistribution to direct social welfare support.”
Lifelong Learning
“Skill acquisition is a continuum, not a finite, unchangeable path”.
The advance of automation increases the demand for high-order cognitive skills, while simultaneously decreasing the demand for repetitive, job-specific skills. At the same time, the retooling of existing jobs make adaptability a fundamental requisite: the idea of a career for life seems no longer plausible, and shifts between jobs will be the norm. Thus, the profile of the ideal employee changes, as a single job may require the combination of skills from multiple disciplines: jacks of all trades will surclass the masters of one. How well countries respond to the changing demand for skills depends on how fast the supply of skills can shift, but the education system is traditionally adverse to change, and adjustment occurs predominantly out of compulsory education. Tertiary education, given its flexibility, allows for enrollment whilst participating in the workforce, and so will be the main provider of the cognitive skill-set required. Government should take action in enhancing instruction during youth, the period in which the learning capabilities are higher, and simultaneously helping to shape a better framework for adult learning as a complement to schooling, in order to “inoculate against job uncertainty.”
A new social contract
Old and new pressures calls for a renovation of the social contract, which the report defines as “a policy package that aims to contribute to a fairer society.” The changing nature of work is costly for workers and adjustments are needed: a global new deal is necessary. This new deal should be different from the one adopted in the US after the Great Depression, as the Depression was a transitory shock, whilst the advance and automation and informality are here to stay. Any social contract should be tailored to the specific country context, but some core elements remain: following the indications of Amartya Sen in “Development as Freedom”, the instruments for equality of opportunity are political freedoms, freedom of opportunity, and economic protection from abject poverty.
“The labor market is increasingly valuing advanced cognitive and socio-behavioral skills that complement technology and make workers more adaptable. This means that inequality will increase unless everyone has a fair shot at acquiring these skills.”
Strengthening social protection
Social protection should be enhanced through the improvement of its three main components: a guaranteed social minimum, social insurance and market regulation.
A guaranteed social minimum, with social assistance at its core, should be based on the concept of progressive universalism, with programs providing financial support to the largest possible share of the population, in order to account for the risks in the labour market. Social assistance needs to be reformed, as the Bismarckian model is no longer satisfying, and should be coupled with subsidized social sinsurance, not strictly based on participation in formal wage employment, financed through mandatory earning based contributions limited, at least initially, to the formal market. In order to provide equal opportunities, a social contract should also include means to provide education and upskilling, necessary for navigating the job market, starting from early childhood development, as knowledge is cumulative and pays more the earlier it starts.
“As social contracts are reimagined, subsidizing a basic level of social insurance — especially for the poor — could be considered. Such a reform could also equalize the costs borne by different factors of production, such as capital and labor, as the financing of the system is at least partly shifted away from labor taxes toward general taxation.”
Universal Basic Income
Universal Basic Income is being hotly debated as a mean to expand the guaranteed social minimum, the report says. It wouldn’t be a substitute for health, education, or other social services, but a supplement to existing social programs, and could end up replacing some programs with income support functions, increasing efficiency by reducing programs fragmentation. It’s monetary nature is an advantage: analysis of cash transfer programs showed advances in school enrollment rates, test scores, and cognitive development, food security and use of health care facilities, especially when combined with forms of intervention. The available evidence seems to disprove one of the main concerns related to UBI, that of work disincentives, as the Alaska dividend program shows no impact on employment (if not for the increase in part-time employment), and a study on the Iranian basic income program found that it did no harm to employment. The regular provision of welfare benefits granted by UBI would contrast with the arbitrarity of means-tested anti-poverty measures, which facing the dynamism of poverty ends up generating winners and losers.
The costs of UBI would depend on the level at which it is set, and its effects would depend on how it is financed. Simulations setting UBI at the level of existing cash transfer programs show that it would have significant fiscal impact, costing an additional 13.8 percent of GDP in Finland, 10.1 percent in France, 8.9 percent in the United Kingdom, and 3.3 percent in Italy. The taxation of UBI alongside regular income and the elimination of tax allowances were then used as sources of revenues for covering the additional costs: “in Finland and Italy, these measures were more than adequate to cover the additional costs of a UBI. In France, those revenues almost offset the cost of such a program. In the United Kingdom, taxing cash benefits and eliminating tax allowances were not enough to cover the UBI.” Simulations for developing countries found significant distributional effects: in Nepal most people would gain, in Indonesia 40% of the poor would be worse off and in South Africa most of the elderly and the poor would be worse off. This is due the structure and performance of the existing schemes, UBI being set at their level. A debate remains around whether some of the “cousins” of UBI, as a Job Guarantee or a Participation Income, conditional to the fulfillment of public jobs, or to volunteering, could be more beneficial, the report states.
Financing social inclusion
A basic social minimum package which uses UBI, set at the average poverty level, and aimed at adults would cost 9.6% GDP in low-income countries, 5.1% in medium-income countries and 3.5% in upper middle income countries. If the UBI was to be for everyone, the figures would be in the double digits in the poorest countries, 9% of GDP for middle income countries and 5.2% in upper-middle income countries. And the invesment for UBI should be coupled with investments in the creation of human capital, the report mantains. A significant mobilization of capital becomes necessary. Taxation patterns diverge from low income countries to high income ones; if the former rely mostly on indirect taxation –consumption and trade taxes – the latter rely on direct taxation. The paper analyzes sources of potential revenues to finance the global new deal, as excises taxes on tobacco and alcool, that even if considered regressive, have usually a long term positive impact on health. Value added tax could have a significant role in developing economies, whilst they are already diffused among advanced ones. A carbon tax may have strong impact, with a study finding that for the top 20 carbon emitting countries, optimal taxation could rise almost 2% of GDP, and be paired with the elimination of energy subsidies, which globally amouts to $333 billion. Personal and corporate income taxation may be aided by technology in avoiding tax avoidance.
“The virtual nature of digital businesses makes it even easier to locate activities in low-tax jurisdictions. The provision of goods and services from abroad without a physical presence in countries where consumers are located escapes the traditional corporate tax.”
Digitizing property registration systems will improve the collection of property taxes, and withholding taxes on payments of services will become more important in economies with strong digital presence and a prevalence of intangibles. Social protection should be enhanced keeping in mind financial costraints, and expanded as more resources are mobilized through improved taxation.
More information at:
World Bank. 2019. World Development Report 2019: The Changing Nature of Work. Washington, DC: World Bank.
Human Capital Project: https://www.worldbank.org/en/publication/human-capital
This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by the World Bank
by Faun Rice | Nov 13, 2018 | Research
Photo by Stefan Kühn, CC BY-SA 3.0
The CESifo Group of Munich is a European research group that seeks to employ both high-quality economic theory and the methods of an empirical institute. Operating since 1999, CESifo is a collaboration between the Center for Economic Studies (CES), the ifo Institute (“Information and Forschung” or research), and the CESifo GmbH (Munich Society for the Promotion of Economic Research).
CESifo publishes a quarterly journal, the latest issue of which is devoted to Unconditional Basic Income (UBI). Five of seven pieces within this 48-page publication present a variety of perspectives on UBI research and theory, predominantly addressing the European context.
- Straubhaar, Thomas, “Universal Basic Income – New Answer to New Questions for the German Welfare State in the 21st Century”, CESifo Forum 19 (3), 2018, 03–09 | Details| PDF Download
The focus: Transforming social support in Germany by replacing Bismarckian welfare state ideals
Straubhaar describes a series of proximate social and economic changes due to globalization, aging societies, income polarization, and dissolution of traditional economic safety nets. He comments that the contemporary version of the welfare state is founded upon 19th century Bismarckian principles that rely on a classic population pyramid (weighted by youth at the bottom), a male-breadwinner model, a fast-growing economy, and a labor-focused Protestant work ethic, none of which will continue to be relevant indefinitely. He proposes UBI as a welfare state model that would completely replace all other publicly financed social support and provide a 21st century solution to the aforementioned changes, particularly in Germany, but as a model for the rest of the world.
- Torry, Malcolm, “Some Lessons from the Recent UK Debate about Universal Basic Income”, CESifo Forum 19 (3), 2018, 10–14 | Details| PDF Download
The focus: Enhancing UBI data distribution and ensuring that discussions maintain a clear definition of the difference between UBI and other related economic policies
Torry highlights a number of key events and issues from the UK that have broader relevance for the global community interested in UBI. The first discusses the important use of microsimulation to predict the impact of economic policies on households of varying incomes (for example, to estimate the loss of disposable income to low-income families if means-tested benefits remain or are removed). The second relates a story in which a public organization cherry-picked UBI data, to which Torry simply says that high-quality research ought to be better distributed. The third and fourth call the reader’s attention to the importance of using specific definitions of UBI schemes and not allowing the term to be misused.
- De Wispelaere, Jurgen, Antti Halmetoja and Ville-Veikko Pulkka, “The Rise (and Fall) of the Basic Income Experiment in Finland”, CESifo Forum 19 (3), 2018, 15–19 | Details| PDF Download
The focus: Improving the international understanding of Finland’s basic income experiment, its origins, and its limitations
The Finnish basic income experiment began as a one-line commitment in the national Government Programme in 2015. Kela, the Finnish Social Insurance Institution, proposed several experiment design options, and a two-year control trial began in January 2017. Kela will evaluate the results and present them to Parliament in 2019.
Basic income stakeholders have become increasingly critical of the trial parameters, raising concerns about the limits of the sample and the pilot’s restricted scope and goals. The authors argue that proponents of UBI initially overstated the extent of the Finnish government’s commitment and capabilities, heralding the commitment as a “watershed” moment for European basic income, when in fact the Finnish experiment and others have been limited from the outset by policy inertia, existing budgetary and taxation systems, and other institutional limitations. The pilot program is designed to assess basic income as a means of activating the labour market, a politically safe goal, and was never likely to result in policy changes of the kind UBI advocates desire to see.
- Colombino, Ugo and Nizamul Islam, “Basic Income and Flat Tax: The Italian Scenario”, CESifo Forum 19 (3), 2018, 20–29 | Details| PDF Download
The focus: Evaluating proposed basic income-related policy packages in Italy and comparing their political origins
Like other European countries, Italy has seen several basic income proposals that have yet to be implemented. Several current potential models are rooted in different political ideologies and thus provide an interesting comparison. The first, “Reddito di Inclusione,” (RdI) is a basic income scheme that targets the most impoverished segment of the population in practice but is intended to be universal. The second, “Reddito di Cittadinanza” (RdC) is means-tested and only covers the population “below the relative poverty threshold” (20). Another model, proposed by Istituo Bruno Leoni (a think tank), involves both basic income and a flat tax.
The authors provide a basic overview of the differences between UBI, means-tested guaranteed income, and negative income tax. They then simulate and evaluate the various government-proposed combinations of policies, concluding that while it is possible to design a fiscally neutral policy package, current government proposals have not yet done so.
- Widerquist, Karl, “The Devil’s in the Caveats: A Brief Discussion of the Difficulties of Basic Income Experiments”, CESifo Forum 19 (3), 2018, 30–35 | Details| PDF Download
The focus: Making UBI research accessible and understandable, particularly with regard to its limitations
Widerquist’s basic thesis is that, contrary to popular representations of policy research, all UBI experiments contain a significant list of caveats. He argues that science journalism has not done an adequate job of communicating the limitations of UBI studies, or indeed any social sciences research, to the public. Furthermore, specialist researchers’ lists of caveats are inadequate for communicating a study’s limitations. Widerquist has an upcoming book that will address both best practices in UBI research given its inherent difficulties and best practices in communication the results of said research to the public and policymakers. In this article, he identifies four broad strategies: (1) iteratively designing studies with public feedback, so that research directly addresses the questions relevant to local stakeholders; (2) highlighting UBI’s impact in publications, rather than its side-effects (even though the latter might be more interesting to researchers); (3) attempting to define a “bottom line” or generalizable conclusion from research; and (4) addressing and discussing ethical controversies.
- Clauss, Michael and Stefan Remhof, “A Euro Area Finance Ministry – Recipe for Improved Governance?”, CESifo Forum 19 (3), 2018, 36–43 | Details| PDF Download
The authors discuss the possibility and potential function of a euro-area finance ministry. Such an organization could either martial Europe’s national fiscal policies to align them throughout the region, or it could be one more “layer” of fiscal authority in each European nation. This paper does not explicitly address UBI.
- Nam, Chang Woon and Peter Steinhoff, “The ‘Make in India’ Initiative”, CESifo Forum 19 (3), 2018, 44–45 | Details| PDF Download
The authors discuss a 2014 federal initiative to promote industrial manufacturing in India. This paper does not explicitly address UBI.
More information at:
“CESifo Forum 03/2018 (Autumn): Unconditional Basic Income”, 01-48, ifo Institute, Munich, 2018
by Hannah Trippier | Oct 16, 2018 | Research
A systematic review has been published that looks at the effects of cash transfers on social determinants of health and health inequalities in sub-Saharan Africa.
Researchers considered both quantitative (both experimental and quasi-experimental) and qualitative studies to be included in the review. To be eligible for inclusion quantitative studies needed: to be conducted in a population of people in sub-Saharan Africa; to investigate the effect of conditional or unconditional cash transfers when compared with other cash transfers, or no cash transfers; report at least one of the prespecified socio-economic outcomes. Qualitative studies that looked at barriers and facilitators to a successful cash transfer intervention were included. Further details of the review methods can be found in the review protocol.
Fifty-three studies were included: 3 randomised controlled trials (RCTs), 22 cluster-RCTs, 8 quasi-experimental studies and 20 qualitative studies. The studies were conducted in 14 countries across sub-Saharan Africa. Due to the diversity of populations and outcomes reported, the researchers did not conduct meta-analysis, instead opting for a narrative synthesis following the approach recommended by Popay et al. (2006). For the qualitative studies, thematic synthesis was carried out to combine the data, following the Thomas and Harden (2008) approach.
The review found that cash transfers can be effective in tackling structural determinants of health such as poverty, education, household resilience, child labour, social capital, civic participation, and birth registration. The review further reported an impact on intermediate determinants including material circumstances (e.g. nutrition, savings), psychosocial circumstances (e.g. self-esteem, reduced stress and anxiety), sexual risk behaviours among adolescents and adolescent empowerment. For this analysis the researchers lumped together unconditional and conditional cash transfer interventions when compared to a control group who did not receive any cash transfers.
Little evidence was reported in the review that compared unconditional and conditional cash transfers. Three studies found that conditional cash transfers were more effective than unconditional cash transfers in increasing school attendance (Baird et al 2011, Robertson et al 2012, Akresh et al 2013, 2016). On the other hand, one study in Malawi found significantly reduced psychological distress among adolescent schoolgirls who received unconditional cash transfers compared to conditional cash transfers (Baird et al. 2013).
More information at:
“The impact of cash transfers on social determinants of health and health inequalities in sub-Saharan Africa: a systematic review”, Health Policy and Planning, 2018
by Harry Curzon | Oct 4, 2018 | Research
A new research study carried out by Jeff Hemsley, Martha Garcia”Murillo and Ian P. MacInnes investigates how social media affects the discussion and spread of policy and ideas with a case study focus on the topic of Universal Basic Income (UBI).
The researchers argue that social media provides an important space for analysis, with Twitter, in particular, being dominated by policy advocates and policy issues. The study thus uses UBI discussion as a case study to determine how policy issues disseminate on social media, rather than focusing on the details of UBI. Social media (more on that below) has taken over across the globe, with many ways that individuals and businesses can connect to help with a myriad of issues. Because of this reliance, there is now adaptable technology used for these websites from Instagram automation to Twitter management so businesses are able to be in every place ‘at once’.
The researchers used keyword collection on Twitter’s application programming interfaces (API) to identify tweets containing any of 23 specific terms related to UBI, dating from July 25th to December 12th of 2016. Within the captured time frame, Twitter users posted a total of 157,000 tweets related to UBI, at an average of 1,127 messages per day. The authors conclude that because the data collection of tweets related to UBI did not break the Twitter rate limit API, it can be inferred that discussion of the topic at the given period was not significantly numerous.
The researchers then reviewed these tweets using content analysis methods to code UBI-related tweets as informative or emotionally resonant, and to examine whether this affected users’ perceptions of UBI. They conclude that, in the UBI discussion space, “interesting” tweets are more likely to be shared, but tweets that have a more emotionally resonant message are far more likely to draw a greater number of new users into the online discussion about UBI. This is often known as one’s “presence” or the ability for their Twitter messages to be seen and spread to other uses. To that end many Twitter users use growth services to increase their presence (see this Tweepi site review for more information on growth services) and that may also explain how UBI messages have been so widespread on Twitter. Social media platforms are all similar in the way that emotional posts, perhaps made on Instagram, are the most viewed and shared. They could also use an Instagram bot, or several bots, to help boost the posts exposure on the audience’s newsfeeds. Often, users of these platforms try to spread messages that help them to gain followers and viewers to their profiles so they can have more people looking at the important messages they want to put out into the world. If you’re looking to do the same with your posts, The Small Business Blog is just one of the websites social media influencers go to in order to find ways to turn their important messages into popular posts. The spread of this influence may warrant further study but for now, the researchers are focussing on how Twitter itself spreads messages.
Because tweets coded as “interesting” are often seen and posted by users already within a “UBI positive echo chamber,” whereas “emotionally resonant” tweets trigger emotional responses which can “activate existing users and can bring users into the discussion space who may participate again in the future.”
For policy issues like UBI to produce further discussion and influence greater numbers of users on social media, the academics conclude that “policy advocates likely need both emotional messages that resonate with people as well as informative messages that are resources for the community.”
For more information:
Jeff Hemsley, Martha Garcia”Murillo and Ian P. MacInnes, “Tweets That Resonate: Information Flows and the Growth of Twitter’s Universal Basic Income Discussion Space,” Policy & Internet, 15 July 2018.
Picture Credit: Financial services and Social media
