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 Hilde Latour | Nov 1, 2016 | Research
In a recent review, the World Bank estimates that around 150 countries in the ‘developing world’ have implemented cash assistance programmes, which together reach approximately 800 million people.
The impact of such programmes in sub-Saharan Africa was thoroughly evaluated, using experimental data from two Unconditional Cash Transfer (UCT) programmes implemented by the Government of Zambia, where each programme is accompanied by a randomized controlled trial (RCT).
A UCT is similar to an Unconditional Basic Income (UBI) in that beneficiaries are paid directly in cash with no requirements on their actions. The main difference between the types of programmes concerns the inclusion criteria for participation. A UBI is targeted at every citizen, regardless of (for instance) socioeconomic status, whereas the UCT’s are often available for the poor population only, often with specific inclusion criteria, such as the presence of children of a specific age in a household or geographical criteria.
In 2010, the Zambian government began testing two different UCT-programmes. The programmes are still on-going. One of them is targeted at households with a child under age 3, while the other is targeted at households with various types of vulnerabilities (female or elderly headed households taking care of orphans or disabled children). Neither of the programmes is explicitly poverty targeted at the household level, but the (geographical) inclusion criteria resulted in 90% of beneficiaries below the Zambian poverty line. The outcome-parameters are identical in the two programmes. In each case, the annual amount transferred to a household is $144 ($24 every two months).
The effects after 2 and 3 years were compared to baseline. Far-reaching effects were reported in both groups, not only on the primary objective, food security and consumption, but also on a range of productive and economic outcomes.
A relatively simple flat cash transfer, unconditional and paid every two months, is shown to have wide-ranging effects on ultra-poor households in rural Zambia, significantly raising consumption and increasing food security, children’s schooling and material well-being, while at the same time strengthening economic capacity and assets.
After three years, household spending was -on average- 59% larger than the value of the transfer received.
These results are presented in a paper published by UNICEF: “Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction? Evidence from two government-led programmes in Zambia.”
Additional info:
A Basic Income News article by Tyler Prochazka about a recent meta-analysis (of 165 studies) on the effects of Cash Transfers can be found here.
cover photo (published with permission) and full citation of the paper:
Handa, Sudhanshu; Natali, Luisa; Seidenfeld, David; Tembo, Gelson; Davis, Benjamin. Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction? Evidence from two government-led programmes in Zambia, Innocenti Working Papers no. IWP_2016_21, UNICEF Office of Research – Innocenti, Florence
Special thanks to Josh Martin and Kate McFarland for reviewing this article.
by Tyler Prochazka | Aug 21, 2016 | Research
The Overseas Development Institute just released the largest meta-analysis of cash transfer programs ever, spanning 15 years of data and 165 studies. The main takeaway is that studies show a consistent reduction in poverty measures. Perhaps an even more important conclusion is that most evidence showed an increase in work participation after receiving the basic income.
The Overseas Development Institute is an independent think tank based in the United Kingdom. The meta-analysis reviewed tax and donor financed cash transfers to individuals and households. Retirement and unemployment were not included in the analysis. The studies had to meet “methodological rigor” to be included in the analysis.
Though these cash transfers differ somewhat from a pure basic income, the study provided the strongest evidence yet that a basic income-type approach is a crucial tool to eliminate poverty.
“There is strong evidence that cash transfers are associated with reductions in monetary poverty,” The report noted. “The evidence consistently showed an increase in total expenditure and food expenditure and a reduction in poverty measures.”
The few studies that did not find a statistically significant impact were possibly due to low transfer levels or because the transfer was only for limited time-frame, the report said.
One of the most heated disputes regarding the basic income is its effect on work participation. The report provided robust evidence that concerns about lowered work participation are unwarranted.
Most of the studies found no statistically significant effect on work participation, and those that found an effect largely found increased work participation and intensity.
Those studies that found decreased work were due to the elderly and individuals with dependents lowering their work participation. Several studies also found lower rates of child labor. As basic income advocates have said, this is likely a socially desirable effect.
Several other positive effects were found among the studies:
- Health service use and dietary diversity improved
- School attendance increased and several studies found positive effects on cognitive development test scores
- Women had greater decision-making power and less instances of physical abuse
- Savings and investment improved, improving recipients’ autonomy
The study has some caveats regarding the overall positive results. But the review said concerns regarding unintended negative effects are not supported by the evidence.
“The vast majority of studies reporting statistically significant results showed that cash transfers contribute to delivering the outcomes that policy-makers intend to achieve. This finding is particularly impressive given its consistency across the critical outcome areas and high number of indicators covered by this review,” the report said.
Jessica Hagen-Zanker, Francesca Bastagli, Luke Harman, Valentina Barca, Georgina Sturge and Tanja Schmidt, “Understanding the impact of cash transfers: the evidence”, Overseas Development Institute. July 2016.
by Tyler Prochazka | Apr 27, 2016 | News
In the last two years an “avalanche” of support has descended upon the basic income, according to a recent article by Five Thirty Eight. The article cites either planned experiments or growing support for the idea in Finland, the Netherlands, Canada, France and even the United States.
Basic Income Earth Network’s own Guy Standing is quoted as calling the basic income an “essential” policy, especially in a world of “chronic economic insecurity,” which has propelled “extreme” politicians in both Europe and the United States.
One essential point is that the effects of the basic income are not yet fully understood. However, the Give Directly organization plans to change that with a test of the basic income in Kenya, providing 6,000 individuals with a guaranteed income for up to 15 years.
Over the years, the basic income won support from across the political spectrum, even winning Richard Nixon’s endorsement in the 60s. Currently, the United States is left with a complicated bureaucratic system of dolling out social assistance, creating welfare traps as people fear losing part of their benefits with an increase in income.
A basic income has even won over libertarians at the prospect of increased efficiency and ending the paternalism of the current system.
Negative income tax experiments in the U.S. found that there were only modest negative effects on work hours, and people used that time to go to school, for example. In Canada, data from a minimum income study in the 1970s showed those that received the minimum income were healthier both physically and mentally. Boys were more likely to go to school and young girls were less likely to give birth prior to age 25. There was also no substantial effect on working hours.
Andrew Flowers. “What would happen if we just gave people money?”. Five Thirty Eight.
by Vito Laterza | Dec 15, 2015 | News
A debate on universal basic income will be hosted on December 17, 2015 by the London-based RSA (Royal Society for the Encouragement of Arts, Manufactures and Commerce; also known as the Royal Society of Arts).
EVENT: The Case for a Universal Basic Income.
TIME & DATE: Starts at 1pm (UK time), Thursday, December 17, 2015.
VENUE: Durham Street Auditorium, RSA House, London, United Kingdom.
SPEAKERS:
Anthony Painter, RSA director of policy and strategy;
Frances Coppola, writer and commentator on banking, finance and economics;
Tom Clark, writer and editor for the Guardian;
Ben Southwood, head of research, Adam Smith Institute.
EVENT DESCRIPTION:
In the last year, discussion about the possibility and desirability of a basic income – a weekly payment for every citizen – has become more audible.
From Silicon Valley entrepreneurs to Mayors in Canada and the Netherlands to campaigners in Switzerland and leading thinkers such as Thomas Piketty, winner of the FT book of the year Martin Ford, and anti-poverty sage Tony Atkinson, the idea has been gathering interest.
In recent days, news that the Finnish government is committing to one of the boldest universal income experiments thus far, has generated an intense fresh round of commentary and debate.
The RSA has been undertaking research into the idea for the past year and at this event Anthony Painter, the RSA’s Director of Policy and Strategy, will present our latest thinking.
Is it feasible? Should we do it? Join the debate.
MORE INFORMATION: +44 (0)20 7451 6868; rsa.events@rsa.org.uk; see also the event page here.
BOOKINGS: Click here to book online.
LISTEN LIVE here beginning 1pm on December 17, 2015.
