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  • Hi everyone.

  • Thank you so much for welcoming me and Joe here, today.

  • We're really excited to be here this afternoon to talk about Universal Basic Income, or UBI.

  • And, we think it's important to talk about this, because UBI is a big idea that has the

  • potential to transform how we, as a community of effective altruists, donors, infomentors,

  • and researchers think about doing good in the world.

  • So, I'll start us off today by introducing UBI and, sort of, the debate about its effectiveness,

  • and discussing how existing evidence from RCTs can help inform how we think about this

  • debate.

  • And then I'll hand it over to Joe, who will talk about some ongoing UBI research, and

  • wrap up with some thoughts and questions about what this means for all of us as effective

  • altruists.

  • So, if you've kept up with the development economics news over the past year or so, you've

  • probably heard a lot of buzz about UBI.

  • As a reminder, UBI is a cash-transfer that is, as the name implies, universal, meaning

  • that all people in a given area receive it.

  • It is not targeted at specific populations, and there are no conditions placed on how

  • the money may be used.

  • The transfer is regularly recurring, delivered over the long term, and sufficient to meet

  • basic needs.

  • And around the world, there are studies taking place to better understand the various iterations

  • of UBI, and its potential impacts.

  • So, what explains the widespread interest in UBI today?

  • On the one hand, in many countries like the US, the economy is being rapidly transformed

  • by technology.

  • Automation is getting cheaper and better every day.

  • According to one study by economists at MIT and Boston University, the number - each robot

  • that came into the world between 1993 and 2007 reduced the number of available jobs

  • by 5.6 So, automation has already displaced, and likely will continue to displace workers,

  • especially in certain industries.

  • This makes UBI a potentially attractive policy option, for those who are concerned about

  • the wellbeing of workers left behind by automation and technology advances.

  • On the other hand, while the world has made large strides in reducing poverty, more than

  • 700 million people still live on less than $1.90 per day.

  • And especially in low income countries where the extreme poor live, UBI is seen as a potential

  • policy option to help bring adults and children up to the poverty line, and ensure that their

  • basic needs are met.

  • In high and low countries alike, there are often concerns about the effectiveness of

  • existing social safety net programs.

  • People wonder if current programs are as effective as they could be.

  • They might stigmatize recipients.

  • They might be ineffectively delivered.

  • And, with the proliferation of the gig economy and alternative work arrangements, employer-based

  • approaches to social welfare, like many of those that we have in place today, may not

  • be suitable going forward.

  • Like any potentially disruptive new approach, of course there are supporters and detractors

  • of UBI.

  • Supporters argue that UBI might be more efficient than existing social programs, that its unconditional

  • nature offers recipients flexibility and autonomy, and that new technology makes it more feasible

  • than ever to distribute basic income transfers.

  • On the other hand, detractors raise concerns about UBI simply being too costly to be a

  • reasonable solution, and they also raise concerns about how unconditional cash may be used by

  • recipients.

  • And of course, despite new technology, the infrastructure to receive payments may not

  • exist in all contexts, especially those where the most poor live.

  • So there are valid points on both sides of this debate.

  • How can we, as effective altruists, decide where to put our weight as a community, and

  • what more do we need to know?

  • So, let's look at some existing evidence.

  • First, on the concern that receiving cash with no conditions attached might lead to

  • a reduction in work.

  • On average, there is evidence that that is not the case.

  • What about concerns that cash given with few or no strings attached will be squandered?

  • In Kenya, researchers tested a program implemented by GiveDirectly, which transferred money in

  • a lump sum to poor households, and they found that it led to increases in both economic

  • and non-economic wellbeing, and did not lead to increases in spending on temptation goods

  • like alcohol or tobacco.

  • What's important to note is that these outcomes were measured less than a year after the transfer

  • was given, and if we're trying to understand cash transfers as a way to reduce poverty,

  • and if we're trying to think about them as a way to inform our opinions about UBI, we

  • should probably consider the longer-term effects.

  • So, we have some research on that as well.

  • Researchers in Uganda and Sri Lanka have found that unsupervised cash grants, distributed

  • in sort of a business setting, had positive impacts on business investment, profits, and

  • household income after 4 or 5 years.

  • But I just mentioned that those were given in a business setting.

  • In Uganda, the grants were given to groups of young people who had submitted business

  • plans.

  • And in Sri Lanka, grants were given to micro-enterprise owners.

  • And if we want to understand the relevance of cash transfers for UBI, we might want to

  • think about cash without this framing or context attached to it.

  • So to shed some light on that question, we can turn back to the study that researchers

  • did of GiveDirectly's program in Kenya.

  • The researchers, Johannes Haushofer and Jeremy Shapiro, simply released longer-term results

  • from that cash transfer, and you might have seen a lot of blogs on the internet, a lot

  • of tweets that have been talking about these results.

  • They've generated a lot of discussion.

  • And overall, the results were largely ambiguous, mostly due to some methodology challenges

  • of the kind that plague many research studies.

  • This includes differential attrition rates between the households who did receive transfers

  • and who didn't, and some others that I'm happy to talk about in office hours tomorrow if

  • you're interested.

  • Even though the results were pretty ambiguous, they're still an important input into the

  • broader evidence landscape around cash transfers and UBI.

  • And, luckily, GiveDirectly is doing many other RCTs and many other studies whose results

  • will continue to inform this discussion.

  • So, when GiveDirectly and the researchers started the study, they designed the evaluation

  • to answer some really important policy questions.

  • They assigned households to three different groups, and that allowed them to figure out

  • what happens to people who receive cash, people whose neighbors receive cash, and people whose

  • communities are not exposed to cash at all.

  • After looking at the three-year survey results, the researchers found that most of those positive

  • impacts that I mentioned after 9 months had disappeared.

  • Households who had received the cash transfers did have more assets, but the impacts on consumption,

  • investment, and happiness were no longer apparent.

  • And there's also some suggestive evidence that households whose neighbors received cash,

  • but who didn't receive cash themselves, experienced negative spillover effects, but again, this

  • evidence is subject to some methodological questions, and we'll want to have more research

  • on this question in the future.

  • And, Joe is going to tell you about some of the efforts that are currently ongoing to

  • get more evidence on these questions in a little bit.

  • But before he does, I want to return to one of the motivations behind UBI, which is reducing

  • poverty.

  • We're not yet sure if basic income will lead to a sustainable income to economic or non-economic

  • wellbeing of the households living in extreme poverty.

  • But while we wait for results, there is already evidence on one approach, which is targeted

  • to households living on less than $1.90 a day.

  • That can sustainably improve livelihoods.

  • It's called the graduation approach, and it was initially designed and tested by BRAC,

  • which is an NGO in Bangaladesh.

  • At its heard, the graduation approach gives a transfer of a productive asset, which is

  • meant to be the core of a small business.

  • And it also includes other complementary services, including coaching and consumption support,

  • usually in the form of cash transfers.

  • This is an actively managed program, in which households receive two years of support.

  • JPAL-affiliated researchers have evaluated the program in Bangaladesh and in 6 other

  • countries around the world, and found that overall the program had positive impacts on

  • most measures of economic and non-economic wellbeing, both when the program ended, and

  • a year later, after all the program support had ended.

  • And in two sites, where it's been tested four years later - so, 7 years after the asset

  • was transferred originally - there's evidence that consumption, income, assets, and psychosocial

  • well-being all continued to improve.

  • Which suggests that the changes caused by this approach have lasting power.

  • Obviously, a program that involves all of these components is more expensive and more

  • hands-on than delivering cash alone.

  • So, researchers and implementers alike are really interested in figuring out whether

  • it can be delivered in a less intensive version, or with fewer components.

  • And, in Ghana, researchers tested just the asset transfer alone, and in Uganda, researchers

  • tested a cash transfer that was roughly equal to the cost of delivering a sort of streamlined

  • version of this program.

  • And in both cases, they found that this sort of capital-infusion alone did not have the

  • same positive effects on consumption, investment, or asset ownership.

  • So, there seems to be something about the full package of the program that impacts households

  • differently than capital alone can.

  • So what does this mean, going back to the question of basic income?

  • One interpretation is that households who are living in extreme poverty in lower and

  • middle income countries face a number of pervasive market failures, like limited access to capital,

  • limited information, and low trust in market institutions.

  • The full package of graduation seems to be able to mitigate some of these market failures,

  • in a way that cash alone may not be able to.

  • So, in these contexts, we still need more evidence on whether cash transfers that are

  • sufficiently large, or delivered in sufficiently long duration, can overcome some of these

  • barriers that existing evidence - that I just mentioned - have not been able to.

  • And it also raises interesting questions about cash transfers in high income countries like

  • the US.

  • Here, the market failures I just mentioned are likely to be less pervasive, and less

  • complex than they are in the countries where we're trying to reduce extreme poverty.

  • But of course, we still need more research across contexts, to understand what impact

  • something like a UBI will have on the household to receive it.

  • With that, I will hand it over to Joe, to talk about some of that work.

  • Alright.

  • Joe Huston, originally from San Antonio, is the CFO at GiveDirectly, a nonprofit which

  • is devoted exclusively to delivering unconditional cash transfers to the extreme poor.

  • Prior to heading GiveDirectly's finance function, he spent three years managing their operations

  • in Kenya and Uganda, where he led the launch of GiveDirectly's 21,000 person experimental

  • evaluation of universal basic income in that country.

  • Previously, he worked at US asset management firm Bridgewater Associates, and earned a

  • BA in Economics from Dartmouth College.

  • Please welcome Joe Huston.

  • I'll start with saying that I'm really glad to be here.

  • I originally found GiveDirectly through the effective altruism community, and so conversations

  • like these are very near and dear to my heart.

  • I also know that there's a bunch of sort of different topics to dig into.

  • UBI in the developed world, the three-year results from Kenya, and so I'll try to keep

  • it brief so we have time for conversation, but we'll see how well I keep the promise.

  • And so, a kind of core piece to start out with, when we're thinking about "How would

  • a universal basic income be different from some of the other things we already know about

  • cash transfers" gets into what's unique about a universal basic income - that particular

  • structure of cash transfer.

  • Well, it's a few things.

  • First, it's universal.

  • So, whole communities are receiving the cash transfer, relative to targeting specific income

  • levels or specific levels of vulnerability.

  • What that also means is that you have a lot of variation in the types of recipient.

  • It's not just business owners or people in extreme poverty, but you have some variation

  • in terms of just, whatever the communities look like.

  • The second thing is that it's a particular amount: it's basic.

  • It's sufficient to cover basic needs, and so that also sort of differs from some of

  • what we already know about other sorts of cash transfer studies, which might be smaller,

  • or big, one-time capital grants.

  • It's a particular size of cash transfer.

  • And the third thing is that it's an income.

  • It should be something you can rely on for your entire life, to sort of provide a permanent

  • cash floor, so that you're always up to a certain standard of living, because you're

  • receiving a cash transfer equal to the cost of that standard of living.

  • And so relative to cash transfer programs, that are one-time grants, like what Haushofer

  • and Shapiro studied, or targeted towards a particular life stage: a pension, or support

  • for people who have kids in secondary school.

  • The idea behind a universal basic income should be something that sort of follows you for

  • your entire life, and provides long-term cash support.

  • So what do we know about that type of cash transfer?

  • Well, you know in general from what Sam told you, is that there's a lot of studies of cash

  • transfers broadly.

  • Literally over 100 studies on cash transfers all over the world.

  • There are a handful of studies that get grouped in specifically about universal basic income.

  • In the 60s and 70s, there was a wave of experiments in the US and Canada that tested a variant

  • of a universal basic income called a negative income tax.

  • From those - they typically weren't universal, they were targeted towards the poor.

  • The experiments also weren't universal because there was sort of a lottery-like system, choosing

  • people randomly to participate in the studies.

  • So you didn't sort of get the community level of facts.

  • They were large, and so they were basic, usually.

  • They provided a meaningful level of support.

  • But they also weren't typically long-term.

  • Usually sort of a few years or so.

  • What you saw from those studies is similar to what you see in a lot of the cash studies.

  • First, people got money, and so they were mechanically less poor.

  • And then you saw that flow through to sort of broad base improvements.

  • You saw educational attainment increase.

  • In Canada, you saw hospitalization rates fall pretty markedly.

  • One thing that's different from the Developed World studies that doesn't show up in the

  • Developing World studies, is that you did see modest reductions in work effort.

  • But where those showed up, they were showing up in populations where you might be more

  • okay with working less.

  • They showed up in teenagers, who worked less and went to school more, and young mothers,

  • just after giving birth.

  • And so you might sort of be okay with those populations working a little bit less.

  • Otherwise, there's a handful of studies in Namibia and Maja Pradesh in India, that looked

  • at universal - these universal cash transfers.

  • But, in Namibia it wasn't a randomized controlled trial, and didn't last for very long: only

  • a couple of years.

  • And in India, where they did use that experimental approach, it similarly didn't last all that

  • long.

  • Then, recently, as you've probably seen in the news, there's been an explosion of studies,

  • basically all over the world.