Metadata. Title: Purpose: Date created: 02/27/17. Created by: Megha Pradhan. Last edited on: 02/27/2017. Last edited by: Megha Pradhan

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1 Metadata Title: Purpose: Date created: 02/27/17 Created by: Megha Pradhan Last edited on: 02/27/2017 Last edited by: Megha Pradhan Notes/guidelines:.

2 Universal Basic Income What does rigorous evidence have to say? Megha Pradhan Abdul Latif Jameel Poverty Action Lab (J-PAL) South Asia New Delhi 27 th February, 2017

3 Universal Basic Income To whom? Universal, not targeted How much? Enough to cover basic needs For what? Unconditional, no strings attached! (recipients don't have to work or do anything else to be eligible) In what form? Cash, not in-kind For how long? Guaranteed for the recipients' lifetimes.

4 Not enough rigorous evidence! Recipients universal basic long-term RCT Manitoba (Mincome), New Jersey, Seattle/Denver 4800 Rural Iowa & North Carolina, Gary, Indiana, Namibia 930 Madhya Pradesh, India 6000 Eastern Band of Cherokees Casino Dividend Finland 2017 Utrecht, Netherlands Mein Grundeinkommen, Germany Reference: Give Directly

5 Upcoming pilot experiment in Kenya Randomized evaluation in rural Kenya, implemented by Give Directly, evaluated by J-PAL affiliates (in development stage) Impact on economic status, time use, risk-taking, gender relations, aspirations and outlook on life 300 villages TREATMENT 1 Long-term basic income 40 villages $0.75 / adult/day 12 years TREATMENT 2 Short-term basic income 80 villages $0.75 / adult/day 2 years TREATMENT 3 Lumpsum payment 80 villages Lumpsum equivalent of Treatment arm 2 CONTROL 80 villages No cash transfers

6 Insights from evidence on cash transfers

7 Conditional & Unconditional Cash Transfers CCTs, tying transfer amount to fulfilling specific conditions, a popular policy tool for promoting better education and health outcomes Case for UCTs if lack of income was binding constraint to the household engaging in desired behavior, then a UCT could suffice easier to implement in that compliance with the conditions does not need to be monitored more flexible if there is not a one-size-fits-all set of investments to improve health and households are knowledgeable UCTs are sometimes labeled (framed) as being intended to be used for a certain purpose, which can nudge households to invest in human capital without enforcing that they do

8 CCTs vs UCTs Baird, McIntosh and Özler (2011) found that CCT performed better at increasing attendance rates and cognitive ability but the UCT arm had significantly lower marriage and pregnancy rates in Malawi Benhassine et al (2015) find that a CCT and a LCT labelled for schooling were just as effective at increasing school attendance in Morocco, suggesting that perhaps the nudge is all that is needed.. Studies have shown that beneficiaries sometimes prefer opting into a CCT over a UCT due to their demand for a commitment device (Ashraf, Karlan and Yin, 2006; Bryan, Karlan and Nelson, 2010) (other reasons could be family conflict over education and health decisions). Burtsztyn and Coffman (2012) show that when the UCT includes monitoring (in the case of school attendance), parents in Brazil did not have a strong preference for the CCT over the monitoring UCT.

9 Research on UCTs UCT program for poor households in Kenya (Haushofer and Shapiro, 2016) increased households assets, consumption, and food security improved psychological well-being, especially among households with female recipients and households that received the large transfer no impact on health or education measure Ongoing study in Kenya (Haushofer et al) on general welfare & local public finance Can UCTs to mothers, coupled with information, improve nutrition and food security for young children? (Carneiro et al, Nigeria) Impact of UCTs and nutritional information on child malnutrition (Field & Maffioli, Mynamar)

10 Debunking the stereotype of the lazyboozy welfare recipient Banerjee et al 2015 look at data from 7 RCTs of government-run cash transfer programs in 6 developing countries shows no systematic evidence that cash transfer programs discourage work Evans and Popova 2014 find and no significant impact or a significant negative impact of cash transfers on temptation goods spend

11 Thank you For questions or requests