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.
There's been demonstration projects like this
one in Germany, called My Basic Income.
And there's one coming up in Stockton, California
as well.
And there's sort of been two larger randomized
controlled trials that are coming onboard.
First, in Ontario, done by the provincial
government there.
And by YCombinator in California.
Because these studies are expensive, researchers
have typically made cost-benefit calculations
to prioritize what they're studying.
And so, almost none of these have been universal,
in the sense of looking at whole communities.
The YCombinator one isn't looking at whole
communities, but they are looking at some
income variation, and so they are doing their
sort of best to balance those types of things.
And then, typically, they haven't gone that
far out in terms of long-term, which might
sort of give you a question about whether
that matters or not in interpreting these
studies.
GiveDirectly sort of took the approach of
trying to design a study that would complement
this body of research, as well as the body
of research about cash transfers broadly.
And so, the study is randomized at the village
level.
And so, whole communities will be treated
differently, with about 44 villages receiving
12 years of monthly payments - about $23 - sized
to sort of meet the poverty line in rural
Kenya.
That group of villages will be compared against
villages receiving 2 years worth of basic
income payments, and a group of villages receiving
one-time cash grants of about $500 per adult.That's
roughly equal to the sum of those 2 years
worth of payments.
And then all three of those groups will be
compared to a control group.
The research is being led by development economists,
like Abhijit Banerjee, who founded JPAL, and
Tavneet Suri, who is also director at JPAL,
as well as Alan Krueger, who is the former
chair of the Council of Economic Advisors
for President Obama, to kind of bridge the
policy worlds across the developing and developed
world.
And the actual research surveying itself is
being done by Innovations for Poverty Action,
and we should have results out early next
year, which is actually when we'll have an
explosion of results out from GiveDirectly,
Canada, and Finland as well.
With this type of study, you sort of want
to look at a broad set of outcome variables.
And so we're looking at both individual level
outcome variables, in terms of earning or
spending or assets, occupations and time-use,
gender relations and risk-taking.
Sort of at the individual level, how do those
things evolve?
We're also looking at community level effects,
because there's something unique about this
type of cash transfer, that everyone in society
- or at least most of the people you're seeing
day-to-day, are also receiving that cash transfer.
And so we're looking at things like community
level economic effects, access to health or
education or water facilities, how things
like community or political engagement evolve,
as well as how crime levels change.
And then we'll look at both of those types
of things based off of the differences in
the cash transfers.
How it varies between the 12 year group of
villages, and the 2 year group, which should
help inform how we should think about the
other studies, that are relatively shorter
term, as well as the structure of how cash
grants achieve different goals or different
outcomes versus the recurring stream payments.
And then, because it's universal, we have
a rich set of data of different types of people
receiving a cash transfer, and then seeing
if they spend it different.
So we'll get to see how - how do different
starting income groups spend cash differently?
How do different age groups, or genders, spend
cash differently?
Which should help inform broader policy questions
beyond just a UBI.
And so, how should the effective altruist
community think about this?
And I'll apologize - the slides got merged
and the formatting got a bit weird.
I think there's a few different types of questions
the community should answer.
The first one is, what do we think the bet
is, in terms of the direct impact of these
cash transfers.
And for this, we have a rich data of other
types of cash transfers, from literally all
over the world, where, if you give cash to
people who don't have it, they are immediately
a little bit less poor, because they have
cash, and you start to see that flow through
into broader wellbeing things, things like
increased consumption, or increased assets
and earnings.
You also see it show up in more indirect things,
like stress or psychological wellbeing.
In Malawi, you saw women whose families received
small, recurring payments get pregnant later,
marry later, and have lower rates of HIV,
because they had a little bit more security
in society.
And so, part of the bet on effective altruism,
is a bet on how it'll differ from other types
of cash transfers.
Which we can maybe dig into in the Q&A.
The second bet for the community, is about
what the sort of broader policy impact of
this type of study will be.
And this applies to any of the - I think it's
not 12 studies GiveDirectly is doing.
And so, to give you one example of what the
policy potential of the universal basic income
study, this is taken from an estimate by the
government of India, where they looked at
how - sort of modeling out how, if they replaced
existing subsidy programs that they maintain
with a modest universal basic income of cash
support provided, essentially universally,
what that would do to poverty in India.
And what they estimated was that it would
take it from about 22% to 0.45%.
Literally bringing over 100 million people
out of poverty, basically immediately.
That doesn't necessarily mean that that's
what we should do: there's an opportunity
cost for that type of spending.
There might be other effects of the cash transfer
that are worth studying.
But it gives you a sense of the potential
scale of the policy implications of this type
of research, beyond the 21,000 people who
are receiving cash from GiveDirectly.
The third, I think bet - or question - for
the effective altruism community, is a more
foundational one.
And I think for that, to start with, it's
useful looking at the process that I think
we mostly apply, at least for effective altruism,
to help existing poor people today.
Where it looks like choosing a set of outcomes
that we think are important - maybe it's earnings,
or health, or how long your life is or something
like that - choosing goods and services that
we think would improve those outcomes, whether
it's a graduation program or a deworming pill,
or a goat, and then choosing providers who
we think can deliver those goods and services
as best they can.
And I think a lot of what the community is
focused on is doing this process better than
how aid and development have traditionally
done it before.
What I think is helpful about cash transfers
is they pose a more foundational question
of who should make these choices, what types
of outcomes are important, whether it's - how
you value earnings, or not getting rained
on, or being a little bit extra healthy.
How you value improvements in the lives of
your children.
The existing status quo is, donors and funders
start with a pool of money, and almost by
virtue of that, they become the choosers of
these next three things.
But cash transfers literally put the budget
in charge of the people we're trying to help,
and lets them make those choices.
I think that switch of power is important,
in part just because of practical reasons.
There's a tale of two track records where
the poor have literally,over 100 studies backing
up the quality of their decision making when
they control the budget.
And then, the funders, implementers, have
whatever you think about the last 50 years
of development history.
I think the second one is that it's a genuinely
tricky problem to figure out what types of
outcomes matter.
In part, people are very, very different.
We see GiveDirectly recipients buy an incredible,
diverse array of things.
Whether it's solar panels, or livestock, or
roofs.
We saw someone start a band.
There's an incredible diversity in humans.
And that's amplified by the fact that most
of the decision making is done by people in
San Francisco or New York, or DC, or London.
And it's on behalf of people who are living
in places like rural Western Kenya.
And I think doing that type of calculation,
which we can try to do better, as effective
altruists, is inherently very, very difficult.
Which is not to say that the entire portfolio
should shift towards recipient-chosen, or
recipient-decided, but existing portfolios
are extremely skewed.
Basically, any way you cut it, whether you
look at humanitarian aid, or institutional
aid given by governments, or US international
charitable giving, basically the whole pots
of money meant to help the poor are decided
by the rich.
Which is a sort of unintuitive result, given
what we've talked about before.
So I think one of the most helpful things
that cash transfers can do, with UBI being
an example of that, is force the effective
altruism community to answer that more foundational
question of who should decide which outcomes
matter, and what types of goods and services
best achieve those outcomes.
Thank you.
Alright.
Great jobs guys.
Few minutes for questions, and of course,
the app, the website, go ahead and submit.
Maybe just to start off with a couple of things
that I could use a little help in filling
in my understanding.
Negative spillovers when some people in the
village get money and others don't: what does
that look like?
I don't have an intuition for - how does somebody's
life get worse in that situation?
Yeah, so, the researchers have done a little
bit of work to try to understand what this
means.
There's one paper that they've released, which
finds that there might be some negative implications
on people's wellbeing.
So, people might feel more stressed or depressed,
if their neighbor is receiving cash and they
aren't.
In the 2018 paper, which is the 3 year results
that I mentioned, the researchers posit that
households that didn't receive cash were selling
off assets, and so they were - they owned
fewer assets.
And then households who did receive cash,
as I mentioned, had more assets at the end.
So, feel free to add, Joe, but that's...
Yeah.
I think the 3 year study is one that's genuinely
hard to interpret, because of the methodological
things which we can dig into.
It's a tricky study to synthesize and know
what to do about, which is part of why - in
2014 we launched a study specifically geared
to answering this question in a high-quality
way.
The question of how do non-recipients of cash
get impacted by being near recipients of cash.
So that we randomized the concentration of
cash transfer delivered in different regions.
So that you can really highlight how people
are affected.
And that'll have results out something like
August or September this year.
I think the other question for the effective
altruism community is how those results, in
part, inform research design, about how you
should approach individually randomized studies
where people are very close.
For GiveDirectly's programming, we've moved
very, very far away from choosing out individuals
from communities.
In general, we've moved much more towards
enrolling almost everyone.
That's literally the case for the UBI study,
but even for our day-to-day programming, we're
moving much towards saturating villages.
And so it's a little bit harder to know, without
seeing the other study, which will look across
villages as well, how to draw the right conclusions
from that 3 year study for what we do today.
Another just kind of clarification question.
When you mention the graduation program, the
concept of asset transfer, I'm picturing a
cow.
Is that the right image for me to have in
mind?
Yeah, so the graduation program is always
tailored to whatever context where it's being
implemented.
Usually it's livestock, but it can also be
supplies to open up a small shop and sell
berets, or makeup, or cigarettes, whatever
makes sense for the community.
Cool.
Questions coming in.
One just about the challenges of running a
study that's going to go on for 12 years.
Things are going to change in the world around
you.
I mean, it's always hard to hold things constant,
but, in that span of time, it gets even more
difficult.
How do you think about those challenges?
Yeah, it's tricky.
You have to guess what you think your follow-up
call center will cost in 2029, or whatever.
Figure out how to manage the cash between
Kenyan banks and US banks, to maintain a sort
of standard payment across those 12 years.
Think about how to increase it with inflation.
It's a bunch of really hard questions, that
we're trying to be pretty paranoid about,
in terms of playing out different scenarios.
If GiveDirectly got shut down in Kenya for
whatever reason, could we continue payments
if we wanted to?
And things like that.
It had a bunch of specific answers to those
little questions, but it required a lot of
- a decent amount of work.
The nice thing is once you get past this hurdle
- we've now enrolled the 21,000 people - it's
a little bit more steady state.
The picture looks like: once a month we send
on payments, and people receive text messages,
and then once every few months we have our
call center call them.
And so that's a much lighter run rate engagement,
that we have to keep up for the next decade
or so.
And so that piece of it is a lot easier than
the initial lift to get all those people enrolled.
We're a little bit over time already, so this
will have to be the last question, but, when
you think about the tradeoffs between a negative
income tax and the universal basic income,
one person is asking, why give the universal
basic income to everyone?
Those that don't need it, it seems wasteful.
How about the universal - not the universal
- how about the non-universal negative income
tax, as an alternative?
Yeah.
One thing I should note is, you can achieve
pretty similar distributions of incomes post-tax,
as in post-transfers, with either negative
income tax or UBI.
Because with a UBI, if you give Bill Gates
his $12,000 a year, you end up taxing it back.
And so you can end up with the same distributions
for both settings.
I think the tradeoffs become in part political:
what's more palatable?
Where in one case it's easier to say, let's
give cash to the poor.
Where in another case it might be easier to
get people on board with a universal support,
that's, everyone's dividend is part of being
in society.
Other people also argue, which I'm looking
forward to seeing, that there's something
helpful about the cash support being universal,
so that it's not stigmatizing.
That it's not just the dole for the poor.
If it's less that and more a universal floor
for everybody, you might think that in part
politically it's easier to maintain, but also
maybe it has different effects.
That people don't view it as, because I'm
poor I get this support, but because I'm part
of society I don't deserve to starve.
And that may have different sorts of effects
in terms of how it's spent.
Or maybe that it's spent more communally.
And so I think those are the things we'll
try to test.
Cool.
Unfortunately we are out of time.
We do have a couple of announcements coming
up.
But first, how about another round of applause
for Sam Carter and Joe Huston?
Thank you very much, guys.
