This is interesting in terms of effective giving, but surely the whole point of "universal basic income" is that it's income! (Also that it's univeral and that it's basic.) A lump sum is not income!
That's the kind of pedantry that we've been missing lately.
I don't know what starting a new business means in Kenya, but here it appears to mean selling vapes or bubble tea.
They could combine them to kill people like Panera do does with caffeine in their lemonade.
It seems underpowered to detect any impact on inflation or its absence - thousands of recipient families out of Kenya's population of fifty million?
I guess the way they frame it, they were making it universal within the given communities, so you had interaction effects. But I don't think even an entire small town having a lot more money in its pockets is the kind of thing that will trigger inflation. Maybe merchants operate more in the town than before, bringing in more consumer and other goods, but the merchants will still be fairly beholden to national price levels.
5: Yes, what the paper actually says is much weaker than the NPR report implies:
Overall we do not reject the null that consumer prices were unaffected, in which case the revenue increases discussed above come entirely from increased sales, albeit with fairly wide confidence intervals
Also interesting that there were better outcomes among the 12-year group than the 2-year group, because the former is more able to plan their lives to make good use of the money, even for investment via starting up rotating savings clubs.
Ultimately I agree with 1, that the moral justification of UBI is that no one starve; maybe there's also a benefit to giving making lump sums available, but it's a different kind of thing. (How spread out were the gains among those who got investments? At least some of them must have lost it all early on. I haven't read the paper.
A bit eery (ghastly/ghostly?) to see Krueger's name (as an author) on a working paper that only appeared more than 4 years after his suicide. Will it go onto his "vitae"?
The surveys on which these results appear to be based were in the field 6-10 months later. The references contain another paper with him as co-author that appeared on line about 18 months after his death, which says he contributed to the methodology.
nmm? TMI?
If he was key in setting the design, he meets the criteria for authorship at most journals. But some insist authors approve the final ms.
I agree that a lump sum payout serves an entirely different function than a UBI. It's more like a start up grant that works great if you have a plan that needs to be funded. It doesn't do much for the basic safety net that all people deserve, no matter how incompetent they are at starting a business.
A friend of mine - single with two kids - was able to take the lump sums from covid, plus the child tax credits before they got Manchined, and used it finance the purchase of a reliable car. Its made a huge difference to that family.
14: I give money to Modest Needs, which is a charity that makes small one-off grants kind of along the lines of GoFundMe (you can choose where to direct it; I just have them spend it on high-need stuff), and "I need to fix my car or I'll get fired" is probably the second most common after "I had an unexpected medical expense and now I can't pay my rent".
If your country has a real UBI, future UBI cashflow could be collateral for a loan. It'd be more dependable than employment income (assume consistent politics). So creating the safety net could still allow for the lump sum's small business incubating function for the smaller proportion of people who'd find that helpful.
It'd be more dependable than employment income (assume consistent politics).
One lesson from the Alaska experience is that careful design of UBI programs is very important to keep politics from going haywire.
I was going to say that Alaska ran a multi-year experiment with UBI, and there ought to be stuff to learn from that.
Yep. Lesson 1 is "fund it from a sustainable and predictable revenue source."
Are fossil fuels really sustainable?
If your country has a real UBI, future UBI cashflow could be collateral for a loan.
This would require some controls, though, as in our world it would open up new abuse opportunities - look at the people who approach poor families getting an annuity under a lawsuit and offer to convert it into a lump upfront sum.
If your country has a real UBI, future UBI cashflow could be collateral for a loan. It'd be more dependable than employment income (assume consistent politics).
Italy already has a system where lenders of certain consumer loans can garnish wages/pension payments.
a) what's a good place to read about the haywire politics of Alaska's UBI thing?
b) Sarah Taber is the D candidate for NC Commisioner of Agriculture.
25a: This is a pretty good overview of the history and the issues.
Anecdotally, some entrepreneurs are able to get going because they have a partner whose income can cover household expenses before the business turns a profit. Which is hwat a UBI would do.
Is future UBI cashflow being collateral for a loan better than the government just making or backing small loans directly?
28: In general I think yes.
-Commercial banks have preexisting specialized infrastructure for making loans, whose overheads are not state expenses.*
-The collateral route allows banks to profit more from UBI, thus widening political support.
-UBI simply gives (potential) collateral to everyone, where direct state lending would favor those with preexisting collateral (or have to find some workaround).
*There will be some gaps where commercial banks just won't go. But after 20 years of Grameen neoliberal philanthropy how many of those gaps are there?
Why didn't they call the paper, "We made it rain down in Africa"?
It always rains down. Nobody wants to publish negative results.
However, every month, the company deducts some amount from their salaries. According to the company, paying the full salary stops the workers from staying at work during the summer when the weather is hot.UBI against heat-stress injuries!
Somewhat agree with 29. The government would have to scale up its capacity to make loans. This isn't a dealbreaker, eg the UK has the British Business Bank, other countries have business development banks under various names, and maybe the US could model it off of something like the regional FHLBanks. But it would require additional expertise and state capacity, and as mossy notes might not be as politically palatable in some cases.
i shouldn't focus so hard on the garnishable collateral part. If you have more, more reliable income, you're less of a risk to lend to. The interest rate lenders require will go down. Just giving people money does amazing things. (Seems similar to solving homelessness.)
The point about reliable funding is well taken. In the vast majority of cases it has to come from taxation. In a US federal context it'd have to be a non-discretionary expense. And probably tax-free, too: imagine the whining from someone who pays net taxes, gets the UBI, then that gets taxed, too. (This would have little or no effect on actual transferred spending power, it'd just be vibes. Which matter tremendously.)
28: ai kind of like this. I know there were coastal communities in New England where people got lump sum payments for getting out of fishing industries. Some of them made remarkably bad business decisions and blew through the money. Some people do great with a lump sum when they retire, but a lot of people did better with defined benefit monthly checks, and having regular social security checks is pretty fantastic when it comes to security. Maybe not for extraordinary innovation, but that should not be the default.
My dentist sold his practice to retire and then lost the money investing in Mexico.
GiveDirectly isn't really a UBI - it's a competitor to GiveWell that takes as its maxim that people know what they need, and giving cash respects autonomy more than techbro-ing QALYs into mosquito nets. So this makes sense for them as a research question, but it's not UBI.
OP reminded me to get round to reading this thing, which frankly wasn't worth it, except that apparently you can run whatever experiments you want on Kenyan people.
The point about reliable funding is well taken. In the vast majority of cases it has to come from taxation.
The other option for funding is for the government to take a stake in all the companies that it is providing this seed investment for. Like a VC portfolio, some of those companies will do quite well and cover the cost of the non-starters. Those profits can then be directed into UBI.
This model is more geared toward tech investing than small business investing, but I do think we should be using it in that context. Like, if the government gives BAE Systems $35 million toward expanding chip fab capacity, the government should be getting $35 million in BAE stock in exchange. The dividends on that stock can be used to help cover UBI.
I've thought about something like that, it's intuitively compelling to me, but why not just tax dividends and buybacks? The government gets the benefit of the winners but doesn't get saddled with owning unproductive losers. I suppose it would make industrial policy easier, but that's an entirely different problem.
35: That's kind of hilarious - until you actually think about them as real people.
An excellent novel about UBI is January 15th by Rachael Swirsky. It imagines a near future US where UBI was passed, but that largely exhausted the capacity for political change. There are several parallel and slightly interwoven POV stories about how it winds up taken for granted, railed against, exploited, etc., but also the base changes that the characters don't even notice any longer.
41: the dentist, successful, solid and then tries to get rich through financial acumen.
He was amorphous, as far as dentists go.
Dentists are my prototypical example of the kind of retirees who should be building a mess of fourplexes.
If he built two fourplexes and leased each to a family of five, he could house 1% of the town.
That reminds me, in the 1970 census, my town had a population of about 3,800. You drive in and see the official population sign followed by "Welcome to here, Home of 4,000 friendly people." But, the 1980 census had us at 4,050 so the official population sign was updated. Then, it was ten years of jokes about which 50 people were assholes. Then, the population dropped again by 2000.
Aztec, NM has a sign like that that says "Home of 4,000 friendly people and 6 old soreheads."
(I forget the actual numbers but that's the format.)
To be clear, there was no sign saying "assholes." It was left to be inferred.
Yes, yours is funnier because of the inference.
That's the current population and the sign looks fairly new. They must put up a new one every so often. Some version of it has been there for decades.
I know I've shared my theory on Dollar Generals before, but I'll say it again because I'm tiresome like that: a new Dollar General is the most depressing thing possible, because it means someone crunched the numbers and is excited to capitalize on a region that is expected to stay poor for a long, long time.
55:: did I respond by telling about the neighborhood I drive through where the Dollar General is boarded up? I meant to.
That either means great things or terrible things are looming.
I would actually like to learn more about the political fallout from Alaska's scheme-- who has written reasonably well about that?
55: I thought this story (now apparently paywalled) touched on that, but don't remember it all that well now.
Idk, 100-yen stores are omnipresent in Japan even as people are pretty well off materially. Maybe people just like cheap stuff.