Basic income pilots

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Basic income pilots are smaller-scale preliminary experiments which are carried out on selected members of the relevant population to assess the feasibility, costs and effects of the full-scale implementation of basic income or the related concept of negative income tax, including partial basic income and similar programs. The following list provides an overview of the most famous basic income pilots, including projects which have not been launched yet but have been already approved by the respective political bodies or for the negotiations are in process.

North America[edit]

Pilots in United States in the 1960s and 1970s[edit]

Beginning in the end of 1960s, there were four basic income experiments conducted in the United States, all in the form of a negative income tax. As Alicia H. Munnell, who was examining the experiments in Indiana, Seattle and Denver explains,[1] a moderate reduction in work effort (17% among women, 7% among men) has been found by the American economist Gary Burtless. Munnell also mentions that the money people had received was not squandered on frivolous products such as drugs and luxury goods. In addition, there has been an increase in school attendance. Nevertheless, no noticeable improvements to health and the overall well-being were discovered and the effect on home-ownership rates was found to be negligible as well.

Mincome in Manitoba[edit]

A similar field experiment of the Canadian Guaranteed Annual Income (GAI), known as Mincome, took place in Dauphin, Manitoba between 1974 and 1979. According to a research into the effects of Mincome on population health, conducted by a University of Manitoba researcher Evelyn Forget in 2011, the experiment has resulted in significant reduction in hospitalization, specifically in case of mental health diagnoses.[2] Among all the people, only two key groups were found to be discouraged from working by the Mincome project – new mothers and teenaged boys, who, instead of entering the workforce at an early age, decided to study until grade 12, increasing the proportion of students who graduate high school.[3]

Native American casinos and tribal profit sharing[edit]

A longitudinal study of 1,420 low income children in rural North Carolina designed to observe their mental condition had the unintended result of also measuring the effect of an unconditional cash transfer on a subset of this group.[4] The Great Smoky Mountains Study of Youth has found that a quarter of the families belonging to the Eastern Band of Cherokee Indians have experienced a surge in annual income due to a newly built casino as during this study, a portion of profits of this casino were unconditionally distributed to all tribal members on a semi-annual basis.[5] Key findings of this study include lower instances of behavioural and emotional disorders among the children and improved relationship between children and their parents, as well as reduction in parental alcohol consumption.[4]

Y Combinator Oakland 2016[edit]

In May 2016, Y Combinator, an American company with the aim of providing seed funding for start-up companies, announced a five year unconditional basic income study, which resembles the experiments carried out in the 1960s and 1970s, in Oakland.[6] During the project, up to 100 Oakland residents will be entitled to an unconditional guaranteed minimum income for a period of six to twelve months to cover their basic needs. One of the main objectives of the study is to promote freedom and to examine the opportunities people become capable of taking if guaranteed financial security, as well as how their happiness can be affected by participation in the project. The city of Oakland has been chosen for this short-term study due to its great economic and social diversity and considerable inequality.[7][8] In case this pilot project proves successful, it will be followed by a trial scheduled for five years.[9]

Ontario Experiment[edit]

In Ontario, three-year basic income projects are being launched in three regions from late spring to fall 2017. The participants of the project were randomly selected among resident of the regions aged 18–64, who were living on low income.[10] The purpose of the experiment is to tackle poverty, providing people with income security while, at the same time, not discouraging them from entering the labour force. Furthermore, as poverty is believed to be one of the biggest determinants of health, the project is believed to improve health condition, which could, in turn, reduce health-care costs for the government.[11]

Africa[edit]

Namibia[edit]

In 2008, the Namibian Basic Income Grant Coalition conducted a two-year basic income pilot in the Otjivero - Omitara settlement, providing $100 per month to every person under the age of 60. The treatment group consisted of around 1,000 people, and a combination of panel and case studies was used to measure outcomes. After the study ended at the end of 2009, a monthly allowance of $80 was paid to all participants until March 2012.[12]

In 2013, due to extreme drought conditions, the Evangelical Lutheran church in Namibia provided a monthly cash grant of $100 to 6,000 individuals in four communities, modeled after the initial pilot program, from September 2013 to May 2014. In June 2014, the program restarted thanks to support from the Waldensian Church in Italy, lasting until June 2015.[13][14]

Uganda[edit]

A program in Uganda randomly awarded an unsupervised grants of $382 to 535 young applicants aged 15–35. The results showed that "the program increases business assets by 57%, work hours by 17%, and earnings by 38%". In addition, many of those who participated in the project have also started their own enterprises, creating job opportunities for others.[15] In January 2017, another pilot study, designed for two years, was launched by the charitable organization Eight in an undisclosed village consisting of 50 households. The experiment, which is being recorded in a documentary, aims to evaluate the effects of basic income in four areas: education participation of girls and women, access to healthcare, engagement in democratic institutions and local economic development. The amount of income distributed to the village residents per month is $18.25 for adults and $9.13 for children.[16]

GiveDirectly in Kenya[edit]

GiveDirectly, one of the highest ranking charities according to GiveWell,[17] has been researching the effects of unconditional cash transfers with randomized controlled trials in both Kenya and Uganda since 2008. In 2013, a paper outlining the results of a two-year study on basic income in Kenya was published, examining a wide variety of outcomes.[18] At the moment, two studies with separate research groups, composed of professors at various research universities in the United States, are being conducted.[19] While the first group is measuring impacts of cash transfers on macroeconomic activity,[20] the other is looking at the impact of different cash transfer designs.[21] In 2016, GiveDirectly announced a launch of a 10-year, $30 million pilot on universal basic income in Kenya.[22]

Asia[edit]

Madhya Pradesh, India[edit]

The basic income project in Madhya Pradesh, India, which started in 2010, involves 20 villages.[23] While the villagers in eight of those got basic income, the others serve as control groups. According to the first communication of the pilot projects, positive results were found.[24] Villages spent more on food and healthcare, children's school performance improved in 68% of families, time spent in school as well as personal savings nearly tripled and new business start-ups doubled.[25] The study has also found an increase both in economic activity and in savings, an improvement in housing and sanitation, improved nutrition, less food poverty, improved health and schooling, greater inclusion of the disabled in society and a lack of frivolous spending.[26]

Latin America[edit]

The family of Selma Ferreira was the first recipient of Bolsa Escola, a precursor to Bolsa Família enacted by governor Cristovam Buarque of the Federal District in 1995.

Bolsa Familia[edit]

Bolsa Familia is a Brazilian federal anti-poverty program with strong resemblance of basic income. It consists of a cash grant, which is given to families below a certain income level, provided they meet pre-arranged conditions such as overseeing their children’s school attendance. Other similar programs are implemented in several Latin American countries, including the Oportunidades programme in Mexico.

Quatinga Velho[edit]

Quatinga Velho is a Brazilian village in the Quatinga district of the Mogi das Cruzes municipality, which is becoming well-known for its basic income project launched in 2008 and organized by the non-profit organization ReCivitas.[27][28] The funding has been entirely based on private donations so far.[29] In June 2011, 83 villagers were given 30 Brazilian reals per person each month.[30] The organization’s objective is to eventually grant the basic income to all villagers and to get similar projects going in other villages as well, both in and outside Brazil. The organizers are currently building a social bank, so that the basic income can be financed through investments rather than donations in the future. The idea is that the bank will operate as an investment bank, but the profit will be allocated to basic income instead of a dividend to shareholders and managers.[31]

Europe[edit]

Netherlands[edit]

The experiments with basic income in the Netherlands, the main objective of which is to make social assistance less conditional, are rather experiments with social assistance as they only focus on current welfare claimants.[32] The most important experiment called ‘Wetten wat werkt’, which is designed for two years, is a result of cooperation of Utrecht University and the City of Utrecht and is supposed to be a “study into alternative approach to deliver social assistance”.[33] During the experiment, the social assistance claimants will be randomly divided into four groups, each of which will receive payments under different conditions – while members one group will have to adhere to the current rules, the existing rules will be relaxed to some extent for the members of other groups. The aim of the study is to investigate the effects of fewer rules on claimants of social assistance. Even though the experiment was supposed to be launched on 1 May 2017, it has not been approved by the Dutch Ministry of Social Affairs and Employment. According to Utrecht officials, the negotiations on how the study should be carried out are under way at the moment (as for May 2017).[34]

Finland[edit]

A nationwide, three-year pilot scheme was launched in Finland on 1 January 2017. In total, 2,000 participants, who were randomly selected among those receiving unemployment benefits aged 25–58, are now entitled to an unconditional income of €560 per month, regardless of whether they have a paid job or not.[35] The experiment is supposed to test whether the implementation of basic universal income could help reduce issues caused by automation, long-term unemployment and lower wages. Especially people who are entrepreneurially minded, but at the same time afraid of not having financial security when starting their own businesses should be encouraged to engage in economic activity.[36] In addition, launching the program of basic income nationwide could decrease bureaucratic costs associated with the Finnish current welfare system, which is both very complex and expensive to run.[37] The experiment continues until the end of 2018 as planned[38]. The results of the study will come in 2020, since register data lag one year behind.[39]

Italy[edit]

In June 2016, the mayor of an Italian coastal city of Livorno Filippo Nogarin launched a basic income project for a period of six months, granting 100 of the poorest families in the city a monthly sum of $537 to cover their basic costs such as rent and food.[40] In January 2017, the scope of the project was extended to include another 100 families. Even though the granted sum is not as high as in case of Finland or other countries, it constitutes a huge relief for the families which are otherwise not protected at all due to the lack of unemployment benefits and minimum wage laws in Italy. The project has already inspired other Italian cities, such as Ragusa and Naples, to consider launching similar schemes as well.[41]

Scotland[edit]

A basic income pilot in the Scottish city of Glasgow and the Fife region is planned to start in 2017. The pilot should receive funding of £5,000 either from trusts, from philanthropic funding or as a result of redistribution of the existing state costs.[42]

References[edit]

  1. ^ http://www.bostonfed.org/economic/conf/conf30/conf30a.pdf
  2. ^ http://public.econ.duke.edu/~erw/197/forget-cea%20%282%29.pdf
  3. ^ "Huffington Post: Ontario will test idea of a guaranteed minimum income to ease poverty". 
  4. ^ a b Ferdman, Roberto A. (October 8, 2015). "The remarkable thing that happens to poor kids when you give their parents a little money". 
  5. ^ Akee, Randall; Copeland, William; Costello, E. Jane; Simeonova, Emilia (2018). "How Does Household Income Affect Child Personality Traits and Behaviors?". American Economic Review. 108 (3): 775–827. doi:10.1257/aer.20160133. 
  6. ^ "Y Combinator announces basic income pilot experiment in Oaklan". TechCrunch. May 31, 2016. Retrieved Jun 1, 2016. 
  7. ^ "The Guardian: Y Combinator Oakland universal basic income pilot project". 
  8. ^ "Y Combinator: Moving forward on basic income". 
  9. ^ "Business Insider: Basic income experiments in 2017". 
  10. ^ "Ontario.ca: Ontario basic income pilot". 
  11. ^ "Huffington Post: Ontario will test idea of a guaranteed minimum income to ease poverty". 
  12. ^ http://www.bignam.org/BIG_pilot.html
  13. ^ http://basicincome.org/news/2014/07/namibia-basic-income-program-returns-to-otjivero/
  14. ^ http://www.namibian.com.na/index.php?id=125733&page=archive-read
  15. ^ Blattman, Christopher; Fiala, Nathan; Martinez, Sebastian (2014). "Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda". Quarterly Journal of Economics. 129 (2): 697–752. doi:10.1093/qje/qjt057. 
  16. ^ "Basicincome.org: Uganda two year basic income pilot set to launch in 2017". 
  17. ^ http://www.givewell.org/charities/top-charities
  18. ^ http://www.princeton.edu/~joha/publications/Haushofer_Shapiro_UCT_2013.pdf
  19. ^ https://www.givedirectly.org/research-at-give-directly.html
  20. ^ https://www.givedirectly.org/pdf/General%20Equilibrium%20Effects%20of%20Cash%20Transfers%20Pre-Reg.pdf
  21. ^ https://www.givedirectly.org/pdf/Evaluating%20Alternative%20Cash%20Transfer%20Designs%20Pre-Reg.pdf
  22. ^ http://www.slate.com/blogs/moneybox/2016/04/14/universal_basic_income_this_nonprofit_is_about_to_test_it_in_a_big_way.html
  23. ^ http://www.guystanding.com/files/documents/Basic_Income_Pilots_in_India_note_for_inaugural.pdf
  24. ^ "INDIA: Basic Income Pilot Project Finds Positive Results," Archived February 9, 2015, at the Wayback Machine. Basic Income News, BIEN (22 September 2012).
  25. ^ Fernandez, Benjamin (4 May 2013). "Rupees in your pocket". Le Monde diplomatique. Retrieved 5 May 2013. 
  26. ^ http://unicef.in/Uploads/Publications/Resources/pub_doc83.pdf
  27. ^ http://observatoriodaimprensa.com.br/caderno-da-cidadania/_ed737_renda_basica_garantida_exemplo_de_acao_social/
  28. ^ http://www25.senado.leg.br/web/atividade/pronunciamentos/-/p/texto/378543
  29. ^ http://www.basicincome.org/news/2013/07/international-googlefives-2-5-million-to-a-direct-cash-transfer-charity/
  30. ^ http://www.basicincome.org/news/2011/06/brazil-recivitas-expands-its-local-big-to-83-people-as-it-charters-the-big-social-bank/
  31. ^ http://www.recivitas.org/#!publicaes/c1fcp
  32. ^ "Basicincome.org: Dutch municipalities experiments". 
  33. ^ "Utrecht University: Utrecht University and City of Utrecht start experiment to study alternative forms of social assistance". 
  34. ^ "City of Utrecht: Welfare experiment Weten Wat Werkt". 
  35. ^ "CNN Money: Finland universal basic income". 
  36. ^ "The Guardian: Is Finland's basic universal income a solution to automation, fewer jobs and lower wages?". 
  37. ^ "CNN Money: Finland universal basic income". 
  38. ^ "Contrary to reports, the Basic Income Experiment in Finland will continue until the end of 2018 - News archive for customers". kela.en. Retrieved 2018-07-20. 
  39. ^ "Nordic Labour Journal: The research project against all odds". 
  40. ^ "Business Insider: Basic income experiments in 2017". 
  41. ^ "Vice News: A city in Italy is giving its poorest residents $537 a month to survive". 
  42. ^ "The Independent: Scotland pilot universal basic income".