Subtitles section Play video Print subtitles 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. GiveDirectly has launched one in Kenya, there's one in Finland, there's one in the Netherlands.