by Hilde Latour | Nov 26, 2016 | News
In a recent IMPAKTER interview, as part of a series exploring the UN Sustainable Development Goals, Ian Bassin (Chief Operating Officer, Domestic, of GiveDirectly), explains how his organization is moving from unconditional cash transfers (UCTs) towards unconditional basic income (UBI) in Kenya.
GiveDirectly traditionally provides UCTs to the extremely poor, operating in Kenya and Uganda.
“We started our program in Kenya because they had a very robust mobile money payment system there, and that’s the means by which we transfer cash to poor households”, Bassin says.
The primary goal of GiveDirectly is to help demonstrate the effectiveness and efficiency of cash transfers. The research done so far shows that giving money to poor people works.
“Poverty in its simplest terms is a lack of money and resources. It is not a lack of capacity or ability”, Bassin notes. “If we’re not doing more with our dollar than the poor could do for themselves, we should probably just be giving them the dollar.”
Recipients of UCTs don’t spend the cash transfer on vice consumption, like alcohol or tobacco, nor does the transfer discourage people from working, Bassin explains. He refers to a recent World Bank Study that has shown UCTs are in fact more likely to reduce than to increase the consumption of vice goods.
“Our recipients use the funds incredibly wisely. […] They tend to spend it on positive goods and what we saw in our original RCT was that after the transfer had ended our recipients saw their incomes rise by thirty-four percent and saw their assets increase by fifty-eight percent.”
Bassin highlights that this research can “help drive cash as a benchmark for decision-making in the aid sector.”
From unconditional cash transfers towards unconditional basic income
GiveDirectly is now planning a major implementation and evaluation of a universal basic income, to launch shortly in Kenya. Instead of giving money to the poor only, a program by which everyone receives cash will be implemented and evaluated.
“A ‘guaranteed basic income’ or ‘basic income guarantee’ is the idea of providing a minimum floor for all members of a community. It’s enough to meet basic needs, so it would be enough to live on without work or other forms of income. It’s guaranteed over the long term so that you can make decisions about major life plans with a minimum level of basic security. And it’s universal in that everyone gets it.”
(…)
“We’re going to be providing whole communities with a regular basic income for 12 years. And we have three of the world’s leading researchers on board to rigorously evaluate it: J-PAL co-founder Abhijit Banerjee, former Chair of the Council of Economic Advisors Alan Krueger, and MIT professor Tavneet Suri. We’ve raised $22 million so far for the project and need to raise another $8m to run the full randomized controlled trial”
(…)
“Six thousand individuals in Kenya will receive a full basic income for twelve years and around 20,000 individuals will receive cash for a shorter period of time.”
Info and links
The full interview can be found here.
Related Basic Income News articles
US / KENYA: Charity GiveDirectly announces initial basic income pilot study
[Kate McFarland]
WORLD: The charity GiveDirectly will start a major basic income trial in Kenya
[Karl Widerquist]
Photo: Bus Ride Kenya-Uganda, 2015, CC 4.0 Jake Stimpson
Special thanks to Josh Martin and Genevieve Shanahan for reviewing this article
by Kate McFarland | Nov 14, 2016 | News
The Nordic Conference on Basic Income Pilots was held in Christiansborg Palace, the seat of the Danish Parliament (Folketinget), in Copenhagen from September 22 to 23.
The Alternative — a green political party that currently holds nine seats in the Danish Parliament — was the official host of the conference. BIEN’s Danish affiliate, BIEN Danmark, organized the event.
All 148 seats in the conference hall were filled for the two-day series of lectures on basic income pilots, which sold out in the preceding week.
BIEN co-chairs Karl Widerquist and Louise Haagh were among the presenters. Louise, who wrote a Basic Income News feature on the conference, opines that, overall, “the Nordic conference went some way to create a new platform for a more positive debate about BI in the wider society.”
Karl describes the conference as “exhilarating”: “People were there from all the Nordic countries, each of which has a very active movement for basic income. The idea is getting very close to the centers of power in several Nordic countries.”
PROFESSIONAL VIDEOGRAPHY
A professional film crew recorded videos of all presentations, panel debates, and Q&A sessions, which are compiled in the YouTube playlist Nordic Conference on Basic Income Pilots 2016:
On the first day of the conference, speakers included (in order of appearance), Guy Standing (BIEN co-founder and honorary co-president), Olli Kangas (Kela), Sjir Hoeijmakers (Vereniging Basisinkomen), Bjarke Friborg (the academic union Dansk Magisterforening), Anne Marie Frederiksen (consultant for the Danish municipality Aarhus), Torsten Gejl (MP for the Alternative), Nicole Teke (International Coordinator of the French Movement for a Basic Income), Karl Widerquist (BIEN co-chair), Niels Meyer (former Professor of Physics at the Technical University of Denmark), The Society Think Tank, and GiveDirectly.
The second day saw presentations from (again in order of appearances) Nanna Kildal (Research Professor affiliated with Uni Research Rokkan Centre), Thomas Boje (Department of Social Sciences at Roskilde University), Torsten Gejl (same one as before), Annika Lillemets (Swedish MP for the Green Party), Finn Sørensen (MP for the Red-Green Alliance), Louise Haagh (BIEN co-chair), Christian Engström (former Member of the European Parliament for the Swedish Pirate Party), and Martin Jordö (Swedish journalist and politician).
In addition to the series of lectures and debates, a special dinner was held at the end of the first day–featuring entertainment by the 14-member swing orchestra Zirkus. Zirkus was also responsible to creating a special trailer that was publicized in the week before the conference:
Commenting on Zirkus’s live performance, conference organizer Karsten Lieberkind (BIEN-Danmark) says, “This band is something special, both in terms of visual performance and music. I think everyone was in a state of amazement.”
IN THE PRESS
The Swedish online magazine Syre, which publishes content on social issues from a green-oriented viewpoint, printed a review of the Nordic Conference on Basic Income Pilots (in Swedish). Indeed, the conference was the magazine’s cover story for the month.
In addition to presenting a general summary of conference, the Syre review focused on participants’ views about the relationship between basic income and organized labor, soliciting opinions from Guy Standing and Malmö basic income activist Göran Hansson. The author also speaks to Thomas Boje about basic income and democracy, and Karl Widerquist about the rise of the recent basic income movement in the US.
Read Karsten Lieberkind’s English translation of the review here on Basic Income News.
REFLECTIONS FROM ORGANIZER KARSTEN LIEBERKIND
Torsten Gejl, MP for the Alternative and an enthusiastic supporter of the conference, has shared these words from Karsten (read Torsten’s full post here):
“To me, this conference is the culmination of not only the preparations for the conference itself but of a process, a gradual but inevitable change in the mindset of many people. maybe in society as a whole, a change in our conceptions of work and labour, that work is not synonymous with labour and that people contribute to society in all sorts of ways. It is about time that we recognize this as a fact.
“Also, it is the realization that people have a right to life, as stated in the the Universal Declaration of Human Rights. In a civilized society, this must, at all times, be an unconditional, non-negotiable fact. And nobody, no individual, no group, no organisation, no society or state should ever be allowed to come between a person and his or her basic needs for survival. Thanks, Karl, for those words.
“And a final word about the Alternative. We may have slightly different views on how to approach the idea and implementation of an Unconditional Basic Income (Ubetinget Basisindkomst), but we most certainly agree on one point: that by trusting people you get so much more in return than you could ever get by exercising power and control.”
Karsten Lieberkind with Louise Haagh
Credit: Michael Husen, BIEN Danmark
As Karsten relates in communication with Basic Income News, the conference has resulted in new connections and correspondence between BIEN-Danmark and the Alternative.
Additionally, the event helped to inspire BIEN-Danmark to pursue efforts to engage labor unions:
“We have long enough been in the defensive about our cause when it comes to labour unions, so now is the time to be in the offensive as we have a program that will actually prepare labour unions for the future.”
Dansk Magisterforening (DM), the Danish Association of Masters and PhDs, is one national labor union that is open to the idea of basic income. As Bjarke Friborg, the co-chair of DM, explained in his talk at the conference, the union does not endorse basic income; however, DM has a positive attitude toward pilot projects and perceives a “shared agenda” between DM and the basic income movement.
Summarizing the upshot of the Nordic Conference on Basic Income Pilots, Karsten says, “I think the most important thing that came out of this conference is that we have established very good and friendly connections with both DM and the Alternative, based on mutual respect and recognition. Also, it has strengthened the ties between the Nordic basic income movements to the benefit of future cooperation.”
Thanks to Karsten Lieberkind for information and input for this article.
Article cover photo: Christiansborg Palace CC BY 2.0 Kristoffer Trolle.
by Kate McFarland | Nov 6, 2016 | News
In the last week of September 2016, the website Ideas for India published a symposium on universal basic income, featuring essays by six well-known Indian economists.
The e-symposium was conducted by Parikshit Ghosh, Professor at the Delhi School of Economics. Contributions are as follows:
• Pranab Bardhan (University of California, Berkeley) “Basic income in a poor country“
In his contribution, Bardhan allows that a universal basic income might be unaffordable in rich countries like the US and UK. But he argues that, nevertheless, a UBI is both feasible and desirable in India. Specifically, he considers a basic income set at about 75 percent of the poverty line, which would replace some but not all welfare programs. (Bardhan mentions public education, healthcare, childhood nutrition programs, and public works employment guarantee programs as ones that are important to retain.)
In addition to countering the argument that basic income would not be affordable, Bardhan responds to the objections that the policy would undermine the value of work and that poor individuals would squander their money. He admits, however, that gaining political support poses a struggle.
Bardhan’s article is an updated and extended version of a piece written for Project Syndicate in June.
• Abhijit Banerjee (Massachusetts Institute of Technology and GiveDirectly) “Universal basic income: The best way to welfare“
Banerjee’s essay is a reprint of a piece initially published on the Indian Express in June, framed in the context of the defeat of the Swiss referendum on basic income. Banerjee argues that, despite the failure of the Swiss referendum, the debate on basic income is not over–and, specifically, India should consider UBI as a way to reduce bureaucracy and make the welfare system more efficient.
• Maitreesh Ghatak (London School of Economics) “Is India ready for a universal basic income scheme?“
In his article, originally published on NDTV, Ghatak argues that India can afford a basic income–specifically, one sufficient to bring every Indian above the poverty line–by cutting subsidies, reducing wasteful spending, and reforming the tax code. He maintains, additionally, that a basic income is not a silver bullet to eliminate poverty, and would need to be introduced in addition to (rather than in place of) other anti-poverty programs and strategies.
• Debraj Ray (New York University) “The universal basic share“
Ray develops a proposal for what he calls a universal basic share in India: a policy in which a fixed percentage of the country’s GDP is set aside to distribute to residents in the form of individual cash transfers. He admits that he has “no clue whether we have the political will to pull something like this off” but is hopeful that the ability to start with small shares might make the policy more tractable politically.
• Kalle Moene (University of Oslo) with Debraj Ray “The universal basic share and social incentives“
In a jointly authored piece with Moene, Ray expands upon the projected benefits of a universal basic share (UBS)–for social cohesion, economic growth, and even possibly sustainable development. They argue, moreover, that UBS can accomplish some of these goals more effectively than UBI.
• T.N. Srinivasan (Yale University) “Minimum standard of living for all Indians“
Srinivasan revisits a minimum income policy that was debated in India during the 1960s.
Reviewed by Robert Gordon
Photo CC BY-NC 2.0 Rishi Bandopadhay
by Kate McFarland | Nov 4, 2016 | News
The latest step to Ontario’s basic income pilot occurred on Thursday, November 3, 2016, when the Ministry of Community and Social Services released a call for public input on the design and objectives of the study and published a new comprehensive report from Project Adviser Hugh Segal.
In February 2016, the provincial government of Ontario, Canada announced a budgetary commitment to finance a pilot study of a basic income guarantee. In June, the government appointed former senator Hugh Segal — who has been promoting basic income in Canada for more than a decade — as the project’s Special Adviser. (For some of Segal’s past writings on basic income, see here.)
Segal has now released a detailed and comprehensive discussion paper in which he lays out his recommendations for the design and administration of the pilot. The government is soliciting input from the public before it makes its final decision.
This release of this proposal for Ontario’s basic income study closely follows the publication of details about the upcoming pilots in Finland and the Netherlands, as well as the charity GiveDirectly’s study in Kenya.
A Negative Income Tax Model
If the provincial government of Ontario decides to adopt Segal’s newly announced proposal, it will test a basic income guarantee (BIG) — wherein cash payments are disbursed automatically and unconditionally to individuals whose income falls below a certain threshold — as a replacement to its Ontario Works program and Ontario Disability Support Program.
Segal recommends that participants in the pilot be guaranteed a monthly income of at least $1320, or 75 percent of the province’s Low Income Measure, with an additional $500 supplement to those with disabilities.
In Segal’s proposal, the BIG is to be structured as a negative income tax (NIT), in which the amount of the subsidy is tapered off for higher earners, in contrast to a “demogrant” model wherein all participants would receive a fixed monthly payment regardless of other earnings. That is, the government would “top up” the earnings of pilot participants whose incomes fall beneath $1320 (or other level chosen for the basic income guarantee). Those who earn more than $1320 per month would receive smaller benefits or, depending on earnings, none at all.
Eligibility is to extend to all residents of the selected communities between the ages of 18 and 65, regardless of current income. All participants will be guaranteed a minimum income, as per the NIT model summarized above. However, depending on their initial and subsequent earned income, some participants may not receive any payment during the course of the experiment. As Segal’s discussion paper notes, “even though the program is based on a principle of universal access, not all participants will receive symmetric payments or any payment at all.”
Segal offers two reasons for his recommendation that the pilot test a negative income tax rather than a universal demogrant. First, this makes the design unique: no other planned trial of a basic income guarantee will employ the NIT model; thus, outside of Ontario’s pilot, no data on the impact of this specific model will be collected. Second, Segal believes that a demogrant, unlike an NIT, is not realistically affordable in Canada (nor in other developed nations).
Experimental Design
Segal recommends two types of studies:
(1) A randomized control trial, to be conducted in an urban center, in which different treatment groups receive different levels of guaranteed income and/or pay different rates of taxes on additional earned income. Subjects will be randomly sampled from all residents (of at least one year) between the ages of 18 to 65, with participation in the experiment being voluntary. Participants would then be randomly assigned to one of four groups, including a control.
(2) “Saturation sites” in which all members of a community receive the basic income guarantee (and are subject to corresponding changes in the tax schedule). Ideally, according to Segal’s report, “one saturation site would be located in southern Ontario, one in northern Ontario, and one would be chosen and planned in close collaboration with First Nations communities.”
In each case, the study is to last a minimum of three years.
Measured Outcomes
According to the discussion paper, the “core question” that Ontario’s pilot endeavors to answer is, in Segal’s words, “Is there a more humane and efficient way to reduce poverty, a way that better respects the rights of those in poverty to make their own life choices, reduces stigma and growth in bureaucracy, yet produces improved outcomes in terms of work and life prospects?”
In order to answer this question, Segal lays out many variables that he urges researchers to monitor and analyze in the pilot, including the following:
- Administrative costs or savings to the government.
- Health outcomes, as measured by (for example) prescription drug use or number of visits to primary care physicians, emergency departments, and hospitals.
- “Life choices” such as career decisions, education decisions, family decisions, and choices in living arrangements.
- Education outcomes of participants and their children, including completion, attendance, and standardized test scores.
- Work behavior, including employment status, hours worked, number of jobs, and participation in job-search activities. The report mentions participation in the underground economy as another outcome of interest.
- “Food security” status as assessed through the Canadian Community Health Survey and the researchers’ own surveys or interviews.
- Subjects’ “perceptions of their place in society, their capacity to contribute, their social environment’s capacity to protect them” as collected through interviews.
- Interactions between the basic income guarantee and other welfare programs (e.g. the Canada Child Benefit).
- In saturation sites, community-level impacts such as changes in rent and prices of goods and services, crime and incarceration rates, civic participation, and the use of public services.
Thus, the Ontario pilot is likely to examine a much wider and more diverse range of outcomes than the impending basic income pilots in Finland and the Netherlands, which focus more narrowly on assessing the impact of a basic income guarantee on employment.
This difference follows in part from a deliberate decision not merely to reproduce these studies. Segal states Ontario should not duplicate research being conducted elsewhere, for the sake of “maximiz[ing] the diversity of various different data sets generated by such endeavours.”
National Context
Segal recommends that Canada’s federal government “consider partnering with any willing province on any Basic Income pilots now being considered or contemplated.”
As Segal describes in the report (links added), Ontario is not alone in Canada in its interest in pursuing a basic income pilot:
“[T]he federal government introduced an enhanced child benefit in July 2016, with the objective of constructively increasing the income of low and middle-income Canadian families with children. Moreover, the House of Commons Finance Committee recommended in its pre-budget report that the government of Canada move forward with a pilot project on Basic Income.
“In its most recent ministerial mandate letter, the government of Quebec instructed the Minister of Employment and Social Solidarity to modernize income support programs and embrace better ways of reducing poverty, including a Basic Income guarantee. The Quebec Liberal Party Youth Wing, in August 2016, summoned the government to implement a Basic Income guarantee in lieu of the province’s current welfare system. The government of Nova Scotia has initiated a comprehensive social support review looking for better ways to eliminate the welfare wall and to better support the working poor. The mayors of Calgary and Edmonton have welcomed the idea of a Basic Income guarantee and associated pilot projects, as has Alberta’s Minister of Finance. In August 2015, the Government of Saskatchewan Advisory Group on Poverty Reduction also recommended a Basic Income pilot.”
Call for Input
As announced on November 3, 2016, Ontario’s Ministry of Community and Social Services will be conducting consultations to solicit public input on the basic income trial, guided by Segal’s discussion paper. Consultations will run through January 2017.
Those who want to provide input may contribute in one of two ways: attend an in-person meeting (see the schedule here) or share feedback online (until January 31, 2017).
The first stage of the pilot study — selecting the sites, obtaining access to data sources, and selecting and obtaining consent from participants — is slated to commence before the end of March 2017.
More Information
News release from the Ontario government (Ministry of Community and Social Services): “Ontario Seeking Input on Basic Income Pilot”
Discussion paper: “Finding a Better Way: A Basic Income Pilot Project for Ontario” by Hugh Segal.
Thanks to Jenna van Draanen for proofreading a draft of this article.
Cover photo: “Terminally Invisible” CC BY-NC 2.0 Kat Northern Lights Man (taken in Toronto, Ontario).
by Kate McFarland | Nov 2, 2016 | Research
An article on the impact of cash transfers on longevity was published in the April 2016 volume of the American Economic Review, a highly distinguished peer-reviewed journal published by the American Economic Association.
Abstract
We estimate the long-run impact of cash transfers to poor families on children’s longevity, educational attainment, nutritional status, and income in adulthood. To do so, we collected individual-level administrative records of applicants to the Mothers’ Pension program — the first government-sponsored welfare program in the United States (1911-1935) — and matched them to census, WWII, and death records. Male children of accepted applicants lived one year longer than those of rejected mothers. They also obtained one-third more years of schooling, were less likely to be underweight, and had higher income in adulthood than children of rejected mothers.
The charity GiveDirectly, which is planning a major basic income trial in Kenya, has published a blog post (dated September 20) on the importance of the study. GiveDirectly points out, for one, that most previous research on cash transfers focuses on developing countries, and little research has been published about the US.
Reference
Aizer, Anna, Shari Eli, Joseph Ferrie and Adriana Lleras-Muney. 2016. “The Long-Run Impact of Cash Transfers to Poor Families.” American Economic Review, 106(4): 935-71.
Online: https://www.aeaweb.org/articles?id=10.1257/aer.20140529
Photo CC BY 2.0 Tony Fischer
