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Experiments in Unconditional Basic Income

Panelists on stage
Feb 14 2017
Sara Button

Say I give you $1000 a month for a year. Maybe three years. Maybe twelve. You can do whatever you want with it—no need to pass any kind of test or apply for any kind of job to receive the money. Use it as you see fit.

How would you spend it?

Researchers conducting studies on this very topic have been working to answer this question for years, trying to identify how people’s lives change when they are given cash, no strings attached. As of late, an increasing number of pilot tests have been and are being implemented all over the world to determine whether this idea—unconditional basic income (UBI)—might be a viable solution to reduce poverty and increase independence. At Experiments in Unconditional Basic Income, the McCoy Center welcomed a panel of three experts to share some of their findings and experiences from work in the field: Guy Standing, Professorial Research Associate at the University of London and Founder & Co-President of the Basic Income Earth Network; Elizabeth Rhodes, Research Director for the Basic Income Project at Y Combinator Research in the Bay Area; and Joe Huston, Regional Director of Special Projects at Give Directly. Stanford Assistant Professor of Philosophy Juliana Bidadanure, who is currently teaching a graduate course on basic income and will be teaming up with the McCoy Center to launch the Basic Income Lab (BIL) to foster research and support for its teaching, moderated the evening.

In her remarks, Bidadanure introduced the audience of nearly 225 to UBI, which revolves around a simple principle: “Giving people cash individually, unconditionally, and universally so they can live an existence free from basic economic insecurity.”

The reasoning behind each of these three elements is simple enough, too. When income goes to individuals of a household rather than the household as a whole, dependents can be more financially independent. When income goes to individuals unconditionally, recipients can avoid the “often punitive” and “extremely intrusive” existing systems that “don’t work well to bring people back into the labor market.” Additionally, it accounts for the fact that many activities aren’t necessarily valued in the labor market, like caregiving or activism. Finally, when income goes to all individuals, regardless of age, earned income, gender, race, etc, great potential exists both to avoid the “benefits trap,” and to eliminate stereotypes that generate divisive rhetoric. Disbursements come in cash rather than in-kind, and are regular.

Guy Standing, who has been pioneering the field for thirty years, presented outcomes from a large-scale pilot study conducted in Madhya Pradesh, India. Eight villages received universal, individual, unconditional income on a monthly basis, and twelve villages served as a randomized control group. They took a census to begin the project, then checked in every six months over the course of a year-and-a-half, as well as a visit six months after the individuals had stopped receiving income. The goal was not only to look at basic income but also to examine recipients’ agency as they went through the UBI program.

The results were undeniably encouraging. Quality of life at the basic level improved across the board in terms of sanitation, housing, food sufficiency, and physical health. Families could spend more on their children’s education.

“Women’s empowerment through the basic income was one of the gems of our pilot,” Standing said. The gender gap in nutritional weight and age equalized, school enrollment and attendance rose most dramatically for girls (in part because they had further to go to reach parity), and women engaged in new work opportunities.

Many skeptics of UBI claim that people will become lazy when allotted regular income, but the data disproves this, too. Earned income demonstrably increased for villagers who received a UBI. The only employed population that decreased? Children. More were in school.

Perhaps most encouraging is a recent economic report for the country of India. Included for the first time was a special chapter on basic income, which Standing summarized as such:  “Basic income in India is feasible. It is affordable. The big challenge is political.”

Joe Huston’s work with GiveDirectly affirmed similar results. Their study of basic income showed a 34% increase in income, 58% increase of assets, and a 42% decrease in child malnutrition. But they have something even more ambitious on the horizon—the largest study of UBI ever, one that will take place over twelve years in more than forty villages in Kenya.  An experiment of that size would allow researchers to compare effects of basic income on things like long-term security, aspirations, and even spousal interactions.

Elizabeth Rhodes also discussed an experiment in the design phase: Y Combinator’s basic income experiment in Oakland, which has been getting a lot of press since its May announcement last year.  A lot of people have been wondering why Silicon Valley would want to get involved in the basic income experiment game, and Rhodes elaborated.

With the rise of the gig economy and increase in automation, the labor market is changing radically. Deep income is growing, and the famed Silicon Valley incubator is interested in basic income as a possible solution to the problem of financial iniquity. Their current approach is not universal—a group of 1,000 diverse people between the ages of 21-35 will receive $1,000 a month for three (or five) years. However, they still hope to see the individual effects of unconditional cash and better understand how people use their time. Will such an amount change community involvement? Well-being? Overall financial health? Rhodes was also clear that they were still negotiating certain aspects of the experiment design and launch.

Promising results from these experiments don’t mean all basic income experiments are perfect models. There are still a lot of questions to probe in determining how UBI can best function to help eradicate global problems. Queries from Bidadanure and the audience pushed panelists to discuss some of these, including the counterfactuals of basic income. One of the biggest Standing cited was “paternalism of various sorts” and the dangers of targeted, rather than universal UBI; Rhodes nodded to subsidized employment and the ingrained idea that work gives us a sense of value, while Huston echoed her point. “Both in the developed and developing world, we spend a lot on helping making poor people complicated…we spend a lot of time and money and effort making non-cash programs that are supposed to help the poor,” but what we should really be asking is whether it actually has to be that complicated? People worry that cash programs won’t work.

From stigma and navigating state bureaucracies to the trouble with targeted basic income, panelists addressed as much as time allowed. Audience members were curious about thresholds—after all, a thousand bucks in Oakland is a lot different than a thousand bucks in Kenya. And what about the millionaires? Why shouldn’t we exclude them from basic income? (Standing’s response: “We’ll see it back in taxes anyway.”)

Overall, though it’s true that “money alone won’t cure all inequalities,” as Rhodes pointed out, what is exciting is the research that is mounting that could hopefully change the world for the better. 

Sara Button

SARA BUTTON is a freelance writer, editor, and educator based in Menlo Park. She has an MFA in Writing from the University of Pittsburgh.