How universal basic income would work best — and it might not be monthly cash payments, a Nobel prize winner's new research suggests
Abhijit Banerjee, co-founder and co-director of the Abdul Latif Jameel Poverty Action Lab (J-PAL) and Nobel Laureate in economics, and other researchers release short-term results of the world's largest and longest universal basic income (UBI) experiment in Kenya, led by GiveDirectly. The experiment is producing unexpected outcomes as data suggests that one-time lump sum payments may have more lasting impacts than monthly payments, particularly in areas such as education investment.
Abhijit says, "USD 22 is not quite enough to start a business. So you have to figure out a way of turning your small amounts of money into a big amount of money. The contrast with the lump-sum is that the lump-sum is precisely to get it once, and that has its downsides: if it's gone, it's gone. But it has the advantage that you don't need to save it up little by little to get to your goal to start a shop. You have the money to start a shop. So in each of these, the kind of the incentives are very different."