I have written skeptically about Universal Basic Income (UBI) in the United States in light of research findings
https://www.nber.org/papers/w32719
https://www.nber.org/papers/w32711
that UBI very slightly encourages non-employment and null improvement in various social indicators.
I argued
https://thomaslhutcheson.substack.com/p/ubi-no
the finding that UBI, viewed as an income transfer instrument, does not produce improvement in social indicators is not fatal. But viewed as an instrument to raise incomes of the beneficiaries, it is inferior to an expanded EITC that encourages rather than even marginally discourages employment.
A new study,
a Bayesian meta-analysis of impact of unconditional cash transfers (UCTs) [a UBI is a UCT] on twelve primary outcomes from 114 studies of 72 UCT programs in middle- and low-income countries comes to very different conclusions. Social indicators DO improve and no decline in employment is observed. How much should this result lead me to alter my skepticism about UBI?
Not much for the following reasons.
1. A Bayesian analysis is not strictly comparable to the null-hypothesis model of the earlier NBER studies. Roughly speaking the former asks, is it reasonable to accept/increase one’s credence In X whereas the later asks, can we reject ~X. It is possible to answer yes to the former and no to the latter without contradiction. I do not place much weight on this reason
2. The targeted populations are very different. On may assume that social indicator-improving actions are much more income constrained in a low- and medium-income country than in the US. To take an easy example, in the US there are many ways a quite poor person can access health care and the additional income from a UBI would not make it more likely they could do so. In a poorer country the additional income coud be of great importance. I do place weight on this reason
3. The new study, no more than the earlier ones, does not compare UCT/UBI to a wage subsidy like EITC and so has little bearing on my skepticism about UBI _as an income transfer instrument_ as opposed to as a social indicator improvement instrument. For the later objective, a UBI/UCT coud be effective in a low to middle income country and ineffective in the US.
Image Prompt: Split image. On side A people are walking into a hospital. On side B similar people are not walking into a similar hospital. The entrance to the hospital on Side B but not Side A is blocked by a dollar sign barrier. [The image is not responsive to the prompt, but DALL E 3 produced even less useful images when given less literal prompts.]
[Standard bleg: Although my style is know-it-all-ism, I do sometime entertain the thought that, here and there, I might be mistaken on some minor detail. 😊 I would welcome comments on these views.]
Good analysis. The marginal utility of +x% extra income in low to middle-income countries is definitely larger than in high-income countries. There likely are also different cultural valuations to pursuing leisure when you're not well off. I don't know whether "slacker" translates cleanly into Gujarati or Bantu.
> that encourages rather than even marginally discourages employment
What is the ideal amount of employment? Surely not infinite. Long time 0 hours worked is likely bad, short time fine (think sabbatical), but if we are talking about 35 vs 45 hours per week, I am on the side of 35 hours.