The full title is “Exploring Universal Basic Income: A Guide to Navigating Concepts, Evidence, and Practices”, and it’s the most recent publishing of the World Bank on the specific issue of basic income, by the hands of editors Ugo Gentilini, Margaret Grosh, Jamele Rigolini and Ruslan Yemtsov. From the original World Bank webpage it can be read:
Specifically, the book examines how UBI differs from or complements other social assistance programs in terms of objectives, coverage, incidence, adequacy, incentives, effects on poverty and inequality, financing, political economy, and implementation. It also reviews past and current country experiences, surveys the full range of existing policy proposals, provides original results from micro–tax benefit simulations, and sets out a range of considerations around the analytics and practice of UBI.
Contributors to the book include (but are not limited to) Francesca Bastagli (Head of the Equity and Social Policy Programme and Principal Research Fellow at the Overseas Development Institute), Jurgen De Wispelaere (Policy Fellow with the Institute for Policy Research, University of Bath), Ugo Gentilini (Global Lead for Social Assistance with the Social Protection and Jobs Global Practice at the World Bank) and Tina George (Senior Public Sector Specialist at the World Bank).
The book is available as a free download, accessible the World Bank’s webpage dedicated to it.
The project will “examine the economics of Basic Income, including the interaction between technology, output GDP, consumer income and expenditure.” The project has been set up with the collaboration of Geoff Crocker from Basic Income Forum.
The research will look at the fitness of BI as an element for the management of macroeconomic demand. Through the use of empirical economic data, the research will test the hypothesis that in highly technological economies the increase in productivity causes wages to fall (a phenomenon that together with falling employment rates is known as the great decoupling), requiring the introduction of a source of income disjoined from work: Basic Income.
The research project will also compare the effectiveness of BI in combating the unemployment and poverty traps with other forms of unearned income, and consider its effectiveness in avoiding economic crisis, that is, its stabilizing effect, in comparison with consumer credit and household debt.
The study will also investigate whether public sector deficit is an inescapable reality in high technology economies, and if there is potential for using debt free fiat money as a replacement for it and as a source of funding for BI, an idea already proposed by Crocker.
The Institute for Policy Research at the University of Bath, which has published a series of reports on the feasibility and implementation of basic income, commissioned a recently published survey on attitudes towards basic income in the UK.
The survey was conducted by the British market research organization Ipsos MORI, who interviewed a sample 1,111 individuals from the UK population aged 18 to 75. Interviews were conducted online in August 2017. In the recently published results, the survey data are weighted to represent the general UK population according to age, gender, region, employment status, social grade, and educational attainment.
In a series of three multi-part questions, Ipsos MORI queried respondents about their views on universal basic income (UBI), which it defined, similarly to BIEN, as “a regular income paid in cash to every individual adult in the UK, regardless of their working status and income from other sources In other words, it would be: universal (i.e. paid to all), unconditional (i.e. paid without a requirement to work); and paid to individuals (rather than to a household).”
Interviewees were also instructed to assume, for the purposes of the survey, that the amount of the UBI “would be set roughly at the amount the UK government judged to be necessary to cover basic needs, e.g. food and clothing (but not housing costs).”
Before laying out the description of UBI, the survey questionnaire additional mentioned, “As you may be aware, some countries are considering introducing a basic income.”
Results
Asked whether they would support UBI described as above, 49% of respondents replied affirmatively (15% “strongly support” and 33% “tend to support”), while 26% replied negatively (17% “strongly oppose” and 9% “tend to oppose”).
Reported levels of support decreased substantially, however, when funding mechanisms were specified. Only 30% would support UBI if it entailed an increase in taxes, with 40% opposing UBI in this case. Meanwhile, 37% would support, and 30% would oppose, a UBI funded by cuts on spending on current welfare benefits. If both funding mechanisms were put into place, support for UBI decreases to 22%, while opposition increases to 47%.
The preceding result is similar to what was observed in a 2016 poll conducted by Canada’s Angus Reid Institute, which saw that respondents tended to favor basic income in principle, but would not support an increase in taxes to fund it in their country.
In the second question, respondents were asked “Regardless of whether you support or oppose the UK Government introducing a basic income, which of the following, if any, would be your most preferred way of mainly funding a basic income, if it was introduced?” Options included “increasing taxes on wealth” (34% favored), “cutting existing welfare benefits” (28% favored), “raising income tax” (12% favored), and “other” (3% favored).
The second part of this question broadens the definition of a “basic income scheme” from the initial definition, asking respondents if they would support such as program if certain compromises were made to universality and unconditionality. More than half of respondents replied that they would support a policy “only paid to those who are in work, in training, doing voluntary work, or pensioners” (52% strongly support or tend to support) or one “only paid to those on low incomes” (57% strongly support or tend to support), with only 18% and 17%, respectively, reporting opposition to the policies. (It should be noted, however, that it would conflict with most established uses of the term–including that of BIEN–to call such a policy a “basic income” scheme.)
Support decreased if the program were only to benefit young people (aged 18 to 24) “who are in work, full time education, or in training”: 35% would support (or tend to support) such a program, while 33% would oppose (or tend to oppose) it.
The third and final question queried interviewees on the “how convincing” they personally found each of six arguments that have been made in favor of basic income. The results tentatively suggest that, among British adults, arguments that emphasize the ability for UBI to support unpaid work tend to have more pull than those that emphasize the policy’s potential to encourage traditional paid work.
The argument judged most convincing was one that framed UBI as a way of recognizing the value of unpaid work: “Many people do very important work that is unpaid, such as caring or other voluntary work. A basic income would be a way of rewarding and encouraging others to do this type of work.” A full 79% of respondents found the argument “very” or “fairly” convincing, while only 15% judged it “not very” or “not at all” convincing.
All arguments provided were found to be more convincing that not (i.e. considered by a majority of survey respondents to be “very” or “fairly” convincing). However, the least persuasive was found be the following: “Many unemployed people do not have an incentive to find a job because benefits they may currently be receiving are withdrawn. As everyone would receive it, a basic income would encourage unemployed people to get a job by allowing them to keep that basic income if they find work.” A relatively small 57% deemed this argument “very” or “fairly” convincing, and 35% found it unconvincing (or “not very” convincing).
Other arguments focused on automation, job insecurity, bureaucracy in administering welfare, the “harsh and unfair” nature of conditional welfare programs.
More information about the survey, including all weighted and unweighted data, is available here:
Jurgen De Wispelaere, a research fellow at the Institute for Policy Research, University of Bath was interviewed on August 7th by Truthout, a nonprofit web-based news and commentary site whose aim is to provide “a platform for transformative ideas, through in-depth investigative reporting and critical analysis.” In this interview, he makes several important points regarding some of the issues in the current debate and research on Basic Income.
De Wispelaere’s key position is that Basic Income’s aim should be first and foremost about relieving poverty and social exclusion. Poverty is fundamentally a lack of money and Basic Income offers a solution to that problem. Compared to other forms of welfare, Basic Income avoids the well-known poverty trap, where earning wages leads to a loss of benefits, while also reducing the need for some of the bureaucracy associated with contemporary welfare states. De Wispelaere also says that welfare states already dispense some amounts of cash or quasi-cash, with Basic Income the main difference is really about how the money is distributed. As he says, “it is not just about whether or not you have more cash with a Basic Income, but also about how you get your cash.” Basic Income is characterized mainly by its unconditionality. De Wispelaere also mentions the Mike Leigh movie, “I, Daniel Blake” as an illustration of how current welfare policies can cause significant problems and how an unconditional Basic Income could make a big difference.
De Wispelaere also speaks about the value of Basic Income experiments, stressing that conclusions reached from one experiment may not be valid elsewhere due to limitations of time and location. Nevertheless, he argues that the experiments are worth pursuing and he identifies three key reasons for performing Basic Income experiments: implementation, politics, and philosophy.
There are a number of aspects of implementation that can be identified and fixed through running a limited experiment, things that are difficult to predict from a theoretical standpoint alone. Basic Income, although it is often presented as such, is not a simple policy; it will interact with other policies such as housing benefits, disability assistance, the tax system and pension rights. When doing an experiment, these interactions can also be tested, along with other parameters. Another great motivation for Basic Income experiments is politics. Risk-averse politicians may like the idea of a Basic Income but be reticent to propose implementing it in full. A limited trial can help gather more political support for a wider implementation. Finally, philosophical considerations reflect the different viewpoints as to whether we can trust people to play by the rules, or whether they are fundamentally lazy. Or, as De Wispelaere puts it, “do we think that the whole range of people to which Basic Income applies all are going to turn into Homer Simpsons?” According to De Wispelaere, “in many cases, evidence alone can’t solve these issues. It’s a philosophical and moral argument that has to be fought and won.”
De Wispelaere also says in the interview he is not convinced by the “Robots Are Coming” narrative. First, because we need Basic Income now to alleviate poverty, job fluctuation, and insecurity. Second, because when the robots do come there will be other significant issues that arise and Basic Income is not enough to solve those. Regarding the Silicon Valley positions, De Wispelaere says: “It is a bit of a caricature, but what they are effectively proposing is a very polarized, divided society. They talk about Basic Income as a necessary part of the solution but don’t mention other important social and economic struggles between the ‘haves’ and the ‘have-nots’. For me, Basic Income may be necessary, but it’s certainly not enough.”
Accompanying the release of this 46-page working paper, Martinelli also published a shorter blog post, focusing on some of the methodological issues underlying his decision to conduct simulation studies.
As Martinelli describes in the post, empirical evidence concerning the effects of basic income can be sorted into two main types: ex-post (“after the fact”) and ex-ante (“before the event”).
Ex-post evidence includes the results of pilot studies and experiments specifically designed to test some of the effects of introducing a basic income, as well as observational studies of related policies such as Alaska’s Permanent Fund Dividend. Martinelli points out that experimental studies are limited in their ability to forecast the effects of a basic income. For example, trials are limited in duration (whereas a basic income would be lifelong) and are influenced heavily by the specific contexts in which they are implemented, constraining the applicability of their results to other contexts. Moreover, the policies analyzed in both experimental and observational studies often diverge from full-blown basic income schemes in key respects.
Ex-ante evidence, in contrast, is exemplified by microsimulation–the technique used in Martinelli’s working paper–which uses computing methods to simulate any of a number of tax and benefit reforms. While microsimulation predict the fiscal and distributional consequences of a broad array of possible policies, it has other limitations; for instance, it does not shed light on the behavior effects of basic income (or other policies) or take account of such effects in prediction. Thus, Martinelli believes that ex-ante evidence must complement, rather than replace, ex-post evidence.
Martinelli’s forthcoming paper “Exploring the Distributional and Work Incentive Effects of Plausible UBI Schemes” will further examine the “distribution of winners and losers” under UBI, again using microsimulation techniques.
