Basic income could transform society. But first, it needs to be tested.
Authors: Abhijit Banerjee, Michael Faye, Alan Krueger, Paul Niehaus, Tavneet Suri
Basic income may not be universal, but strong opinions on it are. They need to be tested.
Give everyone enough money to live on. It is “a bold idea with… the potential to free people to pursue the work and life they choose” or “a senseless act of preemptive self-sabotage,” depending who you ask.
We urgently need to sort out which argument is more accurate. A universal basic income, in the United States or in any other country, would represent a profound change in human social arrangements -- “to the twenty-first century what civil and political rights were to the twentieth,” in the words of India’s Chief Economic Advisor.
Yet debate hinges largely on un- (or under-) tested assumptions about its consequences. Skeptics worry that it will discourage work, for example. Proponents believe it may encourage creativity and risk-taking. As one of us discussed on LinkedIn's Work In Progress podcast this week, the debate is not primarily about whether work and risk-taking are good things, but about how a UBI would affect them.
On issues like these, affluent countries have an opportunity to learn from developing ones. Our labor market structures are in some ways converging towards theirs: while “alternative work arrangements,” including freelancing, contract work and app-related gig work, have grown to 16% of US workers in 2015, the majority of the global poor continue to work a potpourri of “gigs” -- from casual farm work to small shops to cottage production -- to get by. Employment-based solutions to social problems make little sense in such environments.
And developing countries are having their own debate about basic income - not as a remedy to potential future dislocations, but as a solution to the very immediate problem of extreme poverty. India’s government, for example, devoted a full chapter of this year’s Economic Survey to the question.
Basic income could address a number of ways in which current transfer programs fall short. They often deliver benefits to the wrong (non-poor) people, and their delivery of those benefits can be quite porous -- less than half of Indonesia’s massive rice subsidy, for example, reaches the beneficiaries, and fewer than 35% of those who do receive are the poor targeted by the program. In addition, many programs severely distort incentives, as, for example, is the case with India’s electricity subsidies which encourage farmers to pump water out of the ground using free electricity until there is none left. Replacing the problematic, overlapping, and administratively complex hodge-podge of such schemes that many countries now have with a single, universal transfer is an obviously seductive proposition -- if it works.
The time has come to find out. In 2017 we plan to launch the largest and longest evaluation of a basic income yet conducted, studying the effects of a 12-year income guarantee delivered by the NGO GiveDirectly to 26,000 individuals in East Africa using random assignment of villages.
Studying a program of this duration will let us unlock key questions - for example, does making a long term commitment of support matter, or is it simply cash in hand (which is already well-studied) that matters? And the size of the transfers will be enough to enable transformational life changes, not merely incremental improvements in standards of living.
This study launches at a serendipitous moment, with smaller pilot evaluations launching concurrently in the United States, Finland, and Canada. By coordinating research activities across projects, we will be able to gain insight into the extent to which findings from one setting can be generalized to another.
We may learn that a universal basic income is a universally bad idea. We may find it suits the needs and circumstances of some economies but not others. Or we may find it the universally liberating force of which its most ardent supporters dream.
Political Studies & Sustainability Undergraduate | Operations Intern at Ti22 Films| Data Analytics | Process Improvement | Event Coordination | Change Management | Prompt Engineering
1 年Emerging technology like #gpt3 has the potential of displacing nearly every white-collar job while low-income jobs turn to robotics. The #ubi may be a necessary feature of society when #automation obsoletes millions of careers. Automation and human well-being don't have to be mutually exclusive, and it is important to remember big challenges require big solutions.
Senior VP of Sales @ ThreeFlow | Benefits Placement System
7 年Really interesting concept. Execution would need to be tight to incentive right behavior of those looking for work. Thinking about the problem in a slightly different context, would the money used to fund the program be better spent educating those impacted by automation? ...teach a person to fish...
CEO, PolicyEngine
7 年"Basic income could address a number of ways in which current transfer programs fall short. They often deliver benefits to the wrong (non-poor) people..." This may suggest that basic income doesn't give to non-poor people. I think what was meant was "They often fail to deliver benefits to the low-income people as they intend"
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7 年I think that the whole idea is wonderful. (R. Buckminster Fuller suggested it in his 1981 book "Critical Path.") I also believe that people at high income levels ought not to worry about any perceived dangers attached to it. After all, I and many Americans of age to receive Social Security are already living that lifestyle without harming the country so far. As an artist, I depend on it to tide me over between sales of my work. I receive less than $10,000 per year and moved to a part of the country where that was feasible support. Other Social Security recipients cycle in and out of employment and some use it for sustenance while serving as volunteers. Some use it as a means for round-the-clock TV viewing, without hurting anybody else by doing so. It's up to the individual. It's also WAY less expensive than the recent corporate bailouts. I know from personal experience that in the few times that I was unemployed, welfare was a great support for my children. Although some people make a lifestyle of receiving welfare benefits, most just use it to cover rough spots and have paid into the system when they were working. It's never enough money to get comfortable with and its ongoing re-certification system is enough of a hassle to make sure few recipients are comfortable. Most people feel better about themselves when they are self-supporting and, for that reason alone, get off of it as soon as a job is found -- without being prodded. A third form of guaranteed income is highly supported by many people of high- and low-income levels who worry about enabling lazy good-for-nothings. It's called the prison system. In the United States, it's more costly than public education, welfare hotels, drug re-hab or any other anti-poverty program -- probably combined. What's more, it has been proven to provide a meeting-ground for some criminals to train others less apt who are then released, angry and bitter, to take out their frustrations and try out their new skills on the public at large that won't hire them. Some city governments are only recently (since the last recession) getting wise and trying to find ways to minimize this expense and are beginning to steer troubled youths in less-damaging, less-costly directions. I guess the word hasn't gotten out to those commenting here who are not interested in the greater good. In my opinion, the greater good benefits the entire population if only because it makes fellow citizens less likely to disturb or endanger the rest of us. As a contrast, there was a time when our government didn't fund social safety nets like Medicaid. The poor were left to their own devices in whatever cesspool they happened to be living in. When they managed to find a job serving the rest of society, they often infected the rest of society with their diseases. Read about Typhoid Mary. Read "How the Other Half Lives" by Jacob Riis. My point is that, while it may be more gratifying to punish those who are less successful, there is not so much cause for worry. Social Security is guaranteed until death; welfare is not. Prison is guaranteed until death or release, whichever comes first. None of these forms of support are new and untried, therefore, it's not so risky to to attempt them in a different form. We might be able to use its recipients to rebuild our infrastructure or perform other mutually beneficial works. Let's not cut off our noses to spite our faces.