So, the study has shown that people who receive UBI did not see any improvement in the quality of their employment, but did decrease their labor participation rate by about 2%. The way that I read...
So, the study has shown that people who receive UBI did not see any improvement in the quality of their employment, but did decrease their labor participation rate by about 2%. The way that I read this is that this UBI study didn't create better jobs for participants, nor encourage them to find better ones, but it did let the participants spend less time toiling at a shitty job and spend more time living their life.
Is this not the outcome that we want? As automation makes human labor less necessary, we want people to spend less time toiling and more time enjoying life.
Moreover, the 2% decrease, in a sample size of 1000, is almost nothing. To put it in context, if you apply that to an individual 40 hour work week the person would work 48 less minutes. That...
Moreover, the 2% decrease, in a sample size of 1000, is almost nothing. To put it in context, if you apply that to an individual 40 hour work week the person would work 48 less minutes. That strikes me as a strong argument against one of the most common criticisms of UBI: That people won't contribute.
Based on this study the vast majority of them will contribute the same amount as before, and have better lives while doing it
This study shows zero evidence that people will have better lives from the increased amount of money. I know that sounds ridiculous, but the authors didn't bother measuring happiness because...
This study shows zero evidence that people will have better lives from the increased amount of money. I know that sounds ridiculous, but the authors didn't bother measuring happiness because previous studies show that cash benefits don't make people happier as I mentioned here.
I looked at the first study in your linked post. The program gave families of 3 or more people $400/month. It resulted in an increase in food consumption and a subjective improvement in financial...
I looked at the first study in your linked post. The program gave families of 3 or more people $400/month. It resulted in an increase in food consumption and a subjective improvement in financial state.
That makes sense. That it didn't result in self reported mental health improvements doesn't seem surprising. $400/month is no doubt significant for the participating families, but I wouldn't expect it to be life changing. Also, this was during the pandemic, nationally people's mental health didn't tend to improve as it went on.
The way I read your post, the implication is that cash benefits don't improve happiness and that it's settled science. But, on the contrary, a large body of evidence associates more money with increased happiness. The debate seems to be around whether or not there is a plateau at a certain income level or not. Many studies have found one, but some have found that instead happiness continues to increase well into the millions of net worth. You can google "does money buy happiness" or similar to find some of the studies.
You need more than $400/month to see results based on the income levels mentioned in the studies I've seen.
I agree more money makes people happier, but that's totally separate from "should we do UBI?" Especially if we wanted to reduce income inequality, UBI is obviously worse than a program that gives...
I agree more money makes people happier, but that's totally separate from "should we do UBI?" Especially if we wanted to reduce income inequality, UBI is obviously worse than a program that gives more money to people that earn less.
Unfortunately, at the level of more than $400/month, we're getting into the territory of massive benefits that are more inline with earned pensions or disability payments. That's not a trivial amount of money. Governments can only do so many things, and I'd argue they should focus on programs with the best cost-benefit ratio.
I also get your point about mental health, but the study is comparing within the study population, not the broader public. If UBI had a protective benefit to mental health, we would be able to easily tell by comparing the control group's well-being versus the group that received more money.
Sorry, but your assumptions and conclusions read as though they’re from such an incredibly anti-UBI place that I’m not sure the exchange is helpful. The thread looks to me like at least some folks...
Sorry, but your assumptions and conclusions read as though they’re from such an incredibly anti-UBI place that I’m not sure the exchange is helpful. The thread looks to me like at least some folks are making statements where the sample size and dollar amount and timeline are okay when something supports their opinion, but not when it doesn’t.
I also want to challenge the veracity of any conclusions about UBI at all based on a few thousand people getting $400 for a few months during the pandemic.
As for the costs of UBI, IMO arguments rooted there don’t belong in this discussion at all. This is about “does it work”, not “how or who pays for it” - that’s changing the topic into an area where someone who has prejudged UBI feels like they might have a better argument.
Try and be intellectually honest in arguments I guess is what I’m going for here.
I’m kind of interested in finding out the origins of this paper- who funded it and the background of the authors, because it smells funny to me.
I apologize if I've come across as uncharitable. I care a lot about UBI and cash benefit programs because I think they could be extremely effective measures to combat poverty, but I simply haven't...
I apologize if I've come across as uncharitable. I care a lot about UBI and cash benefit programs because I think they could be extremely effective measures to combat poverty, but I simply haven't seen the evidence supporting truly universal basic income as doing all the things proponents say it should do. I'm strongly supportive of increased benefits that actually help people, so I've tried to stay up to date on the research of what government benefits actually help people.
No apology needed. I can’t claim to know too much about comparing programs and effectiveness or the studies done. I do feel like I have a lifetime of experience with criminalizing and punitive...
No apology needed. I can’t claim to know too much about comparing programs and effectiveness or the studies done. I do feel like I have a lifetime of experience with criminalizing and punitive attitudes toward poverty and the poor though… and faux academic writing funded in bad faith. This is a bit of a hot-button issue for me currently I’m realizing, as I’m up to my eyeballs in elderly people watching cable news and wanting to talk election… so if I was aggressive, I also apologize.
I might have to get more strict with my media until the next president is fully placed in office.
There are other benefits too. If this money comes from taxing income of high earners or wealth in general, then this money is way more likely to be spent and stimulate the crap out of local...
There are other benefits too. If this money comes from taxing income of high earners or wealth in general, then this money is way more likely to be spent and stimulate the crap out of local economy. We want to stimulate producing actual stuff and actual services because that means more taxes and more money for public services. The rich will keep it in capital markets where we have reached the point of diminishing returns ages ago.
Selling it as a re-distributive program to boost economies is good. I've mostly heard that argument as a secondary or even incidental effect since most of the focus I've heard is around reducing...
Selling it as a re-distributive program to boost economies is good. I've mostly heard that argument as a secondary or even incidental effect since most of the focus I've heard is around reducing hours worked or increasing education, etc.
„Helicopter money” is sometimes used to describe direct money transfers like UBI or COVID-era stimulus in the US. UBI trials probably don’t focus on this kind of impact because it’s researched...
„Helicopter money” is sometimes used to describe direct money transfers like UBI or COVID-era stimulus in the US. UBI trials probably don’t focus on this kind of impact because it’s researched quite well. It’s super effective because such money is usually spent quickly and locally. You don’t even have to be a modern monetary theorist to recognise those benefits.
In 2016 where I live we have implemented quite high child support subsidy which is a quasi-UBI essentially. Classical economists were saying we’d never be able to support expenditure this high and we’d see enormous spike in inflation. Neither has materialised (until supply shock inflation due to pandemic and second invasion of Ukraine but that’s an external factor beyond control).
This is what actually happened. We’re now one of the fastest growing economies and despite doom and gloom inflation remained stable and debt to GDP ratio decreased.
That's a really good example, thanks! Child support subsidies are a great policy since they encourage children and help support working parents. They're a little different from giving money to...
That's a really good example, thanks! Child support subsidies are a great policy since they encourage children and help support working parents. They're a little different from giving money to everyone, even rich dual income couples.
Unfortunately this programme has been proven to have negligible impact on birth rates and we’re still leading top depopulating countries. There are also no income criteria so rich can still...
Unfortunately this programme has been proven to have negligible impact on birth rates and we’re still leading top depopulating countries. There are also no income criteria so rich can still benefit from this money. It definitely decreased child poverty on top of economic benefits I mentioned though.
Did the credit keep the birth rate higher than it would have been without the credit? As Poland has gotten wealthier, birth rates would presumably continue dropping as they have in other...
Did the credit keep the birth rate higher than it would have been without the credit? As Poland has gotten wealthier, birth rates would presumably continue dropping as they have in other countries. Basically, is it possible the birth rate would be worse without the credit?
It’s hard to tell but given the scale of the program and depopulation rate it seems to be at least ineffective. We might going on a South Korean path where profits from that high growth are not...
It’s hard to tell but given the scale of the program and depopulation rate it seems to be at least ineffective. We might going on a South Korean path where profits from that high growth are not redistributed equally enough.
The question is why would we use UBI or guaranteed income if that's the goal? Wouldn't it be better to just mandate more national holidays be observed by large employers or increase paid leave...
Is this not the outcome that we want? As automation makes human labor less necessary, we want people to spend less time toiling and more time enjoying life.
The question is why would we use UBI or guaranteed income if that's the goal? Wouldn't it be better to just mandate more national holidays be observed by large employers or increase paid leave options for parents?
But why do all of the things when we could focus on doing the most impactful things? The more policies and special rules you have, the messier things get. If the goal is making sure poor people...
But why do all of the things when we could focus on doing the most impactful things? The more policies and special rules you have, the messier things get. If the goal is making sure poor people have time off, we should mandate they get paid time off as many places have.
I don't know if it's true that more policies means things are worse. Maybe "messier"- I think in this context that's subjective. Regardless, we're skipping the hardest step, which is to transition...
I don't know if it's true that more policies means things are worse. Maybe "messier"- I think in this context that's subjective.
Regardless, we're skipping the hardest step, which is to transition the goal to "let people have a reasonable amount of free time" from "make the most possible profit".
Governments can only write bills for and manage so many different policies. The more programs you want to run, the more likely there are to be hidden inefficiencies and missed opportunities...
Governments can only write bills for and manage so many different policies. The more programs you want to run, the more likely there are to be hidden inefficiencies and missed opportunities because attention is spread thin (see: every big corporate bureaucracy). It's harder to study and improve 50 quirky policies compared to 4 really solid ones.
Every country I can think of already has national holidays. Mandating additional paid time off doesn't seem like that far of a step considering how many states and countries have done it. Exactly how much or how little time off everyone should have is much more contentious.
America has national holidays but not in the sense that businesses are required to offer paid time off on those days. Additional holidays in America would just be words unless paid leave was...
America has national holidays but not in the sense that businesses are required to offer paid time off on those days. Additional holidays in America would just be words unless paid leave was mandated.
While I agree that political will is finite, I think trying to solve complex problems with simple solutions has its own pitfalls.
Stealing highlights from another site: I'm sure people will argue that they just aren't being given enough money, but $1000 a month is honestly a lot. That it just increases leisure time and...
Stealing highlights from another site:
1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years, with a control group of 2,000 participants receiving $50/ month.
We gather detailed survey data, administrative records, and data from a custom mobile phone app.
The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers.
a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours,
with participants’ partners reducing their hours worked by a comparable amount.
The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances.
Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements.
We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
I'm sure people will argue that they just aren't being given enough money, but $1000 a month is honestly a lot. That it just increases leisure time and doesn't noticeably improve most anything else continues to sway me against UBI.
However, I'm still strongly supportive of cash benefits for poverty. They're much easier to administer, and we have much stronger experimental evidence in favour of their efficacy from Mexico, South America, and parts of Africa with GiveDirectly.
Silly socialist! Don't you know humans' only value is economic efficiency? Next you're going to tell me that some things can have value without being quantifiable! You'll never make numbers go up...
Silly socialist! Don't you know humans' only value is economic efficiency? Next you're going to tell me that some things can have value without being quantifiable! You'll never make numbers go up thinking that way.
Edit: in case you're keeping count, this is absolutely a strawman. No arguments there. Consider it an expression of my frustration rather than an argument.
This feels like an uncharitable take on the study. I don't expect everyone to read such a long report, but they didn't measure this because the focus of the study was on education and quality of...
This feels like an uncharitable take on the study. I don't expect everyone to read such a long report, but they didn't measure this because the focus of the study was on education and quality of jobs.
One of the main arguments for UBI has always been "people will quit their toxic jobs and find ones that make them happier!" So they did a high-quality study which ended up finding no noticeable effects on employment quality.
The authors didn't measure this because it's already well reported in the literature that cash benefits neither improve nor worsen mental or physical health (study 1). As an outrageous example to...
The authors didn't measure this because it's already well reported in the literature that cash benefits neither improve nor worsen mental or physical health (study 1). As an outrageous example to prove my point, people aren't even happier when they get thousands of dollars in medical debt paid off! In fact, some people somehow have worse mental health outcomes after having their medical balances taken care of (study 2).
Thank you for providing sources and arguments to the discussion, but I have some critisisms of my own. The main point of a UBI is to give people a more reliable income, which gives more breathing...
Thank you for providing sources and arguments to the discussion, but I have some critisisms of my own.
The main point of a UBI is to give people a more reliable income, which gives more breathing room in their spending. This in turn should improve mental wellbeing (as people have less stress about finances) and have the financial freedom to switch jobs or work less. Especially long-term constant stress is terrible for someones health and decision-making ability.
A temporary 400 dollar food stamp is not realiable over time and is not enough money to significantly change someones financial situation, it is made to keep people afloat, but only just about.
Debt forgiveness does not help in this regard either, as it does not change peoples income. In fact, if nothing changes, a person could just as easily fall back into debt.
So in short: cash does not make people happier, but a stable income means less financial worries and empowerement to change jobs or working hours, which absolutely makes people happier.
This is supported by one of the most well-known studies on UBIs: the Finnish study
According to the analysis of the survey data, the wellbeing of the basic income
recipients was clearly better than that of the control group. Those in the test group
experienced significantly fewer problems related to health, stress and ability to
concentrate than those in the control group
If you want to learn more about UBIs, I recommend Utopia by Realists by Rutger Bregman.
Do we have any other studies that support universal basic income? That Finnish study only had a benefit of 560 euros per month for one year which is pretty short. They also only gave money to...
Do we have any other studies that support universal basic income? That Finnish study only had a benefit of 560 euros per month for one year which is pretty short. They also only gave money to people that had recently received unemployment benefits which is a group that would presumably benefit from more financial aid. That's completely different from completely universal basic income. I'm strongly supportive of cash benefits for people in financial distress or poverty like that Finnish study provides evidence for!
Also, the lack of mental health benefit from writing off medical debt is just another example of why it would be better to simply give needy people cash and let them decide how to spend it. It's easy to imagine a parent that would be happier having enough money to buy a nice birthday cake for their kid rather than having all their medical debt paid off.
For me this study is supportive of UBI, as the main benifit of UBI is that it gives both poor and lower to mid income people money with no bureaucratic nonsense. If you only want to give money to...
For me this study is supportive of UBI, as the main benifit of UBI is that it gives both poor and lower to mid income people money with no bureaucratic nonsense. If you only want to give money to the needy, you need to quantify what "poor" and "needy" are, and that almost always means that people have to jump through hoops to get support and it also introduces a poverty trap. A UBI does not have that problem.
I think it’s important to distinguish between studies done in developed countries and those done in poorer countries. Here is GiveDirectly’s summary of a 2016 study done in Kenya: That’s probably...
I think it’s important to distinguish between studies done in developed countries and those done in poorer countries. Here is GiveDirectly’s summary of a 2016 study done in Kenya:
This was the first randomized control trial that GiveDirectly conducted and it studied some of the first transfers we delivered, with the aim of incorporating rigorous evidence into our operations and generate actionable evidence about cash transfers from the start. The study documented large, positive impacts of cash transfers of different magnitudes (~$300 and ~$1000) across a wide range of outcomes including owned assets, earnings, food security, psychological well-being, and domestic violence, an average of four months after transfers ended.
That’s probably because the people there were a lot poorer to begin with. It’s an efficient way to help people if you’re indifferent to who benefits.
(GiveWell recommends other charities as more efficient than that, but they use cash transfers as a benchmark.)
Good point. The baseline poverty level definitely makes a big difference, and the study results do vary by country. That's part of why I cited GiveWell as a potential counter example to this study.
Good point. The baseline poverty level definitely makes a big difference, and the study results do vary by country. That's part of why I cited GiveWell as a potential counter example to this study.
From study 1: doesn’t it show that those who received payments reported marginally better health? It shows that those who were in the treatment group reported their health as fair to poor less...
From study 1: doesn’t it show that those who received payments reported marginally better health? It shows that those who were in the treatment group reported their health as fair to poor less frequently than the control. Although they reported as more anxious/depressed by a tiny (perhaps statistically insignificant) margin.
This study does strike me as difficult due to the confounding factor of the ongoing pandemic. Trying to measure health changes from a UBI pilot when there’s a novel pandemic - including lockdowns and waves terrible news - might be hard. Yes, there’s a control group. But if everyone’s feeling especially anxious and depressed $400/month might not impact that.
We'd probably agree that rich and poor people were affected by the pandemic differently. It's possible that $400/month wasn't a large enough amount to make a difference to mental health, but we...
We'd probably agree that rich and poor people were affected by the pandemic differently. It's possible that $400/month wasn't a large enough amount to make a difference to mental health, but we don't really have the evidence to support this idea.
It's also possible that there's something fundamentally different about the mental health effects of earned income versus a guaranteed income. As someone else pointed out, rich people are, generally, happier with their wealth.
Generally agree. I suspect that someone who has grown up in poverty to a family that's been in poverty for generations might need so much more than just a little breathing room to start closing...
Generally agree.
I suspect that someone who has grown up in poverty to a family that's been in poverty for generations might need so much more than just a little breathing room to start closing the health/wealth gap. Perhaps it's like working yourself out of depression. From experience I can say that even once you start doing the right things (exercising, healthy eating, socializing, reducing drug use) you won't see much improvement for months. But suddenly things start improving.
Interestingly, in the first study you linked, the one which claims no improvement in self-reported mental or physical health, the researchers found a statistically significant decrease in...
Interestingly, in the first study you linked, the one which claims no improvement in self-reported mental or physical health, the researchers found a statistically significant decrease in "financial distress" in the treatment group. Food security spiked for the treatment group at first, but returned to parity with the control over time, which suggests that people had other more pressing concerns at the time than food. Thinking back to the high pandemic, I can see that.
In fact, most indicators showed net positive statistical changes for the treatment group nearly across the board, with the exceptions being food insecurity (beyond the initial spike), school attendance rates, and self-reported physical/mental health, which all showed no statistically significant changes between groups.
The study itself is interesting, but I'm not sure it's the best thing to base a generalization on, as the researchers themselves acknowledge that the study was performed under unique circumstances, coinciding as it did with the height of the COVID pandemic and its attendant economic chaos.
As for the other papers you've linked, including the OP, both are working papers for the NBER. They are not intended to make definitive statements about the subjects they discuss, they're intended to direct researchers to areas the authors feel need further examination. From the first page of the paper:
NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies
official NBER publications.
I had never heard of the NBER before you linked their working papers, which isn't surprising since I'm not an economist. I have no particular reason to doubt their credibility, but neither am I going to take any particular figure in their working papers as gospel. They're pretty explicitly saying not to do that by publishing it as a working paper.
You might want to pull the reins a bit on outrageous examples to prove your point, is all I'm saying.
I could still see this being potentially worth it by preventing other things later on: being less likely to experience stress- or health-related leaves of absence, for example.
I could still see this being potentially worth it by preventing other things later on: being less likely to experience stress- or health-related leaves of absence, for example.
It's a nice thought, but that theory hasn't been supported by any studies on cash guarantees. If that was the case, they would have noticed more difference in the number of hours worked over the...
It's a nice thought, but that theory hasn't been supported by any studies on cash guarantees. If that was the case, they would have noticed more difference in the number of hours worked over the course of this years-long study.
Depending on how pessimistic you were going in, this could be seen as good news. I’d expect that an extra $1000 a month might result in people being more likely to quit a job or less likely to...
Depending on how pessimistic you were going in, this could be seen as good news. I’d expect that an extra $1000 a month might result in people being more likely to quit a job or less likely to start a new job when it’s a close decision. And it seems there’s some effect, but not that much.
Another question, though: when a close decision goes the other way, is it a better decision? I think there’s no way of knowing without understanding the situation. But without any other information, I like to assume that people make better decisions when under less financial pressure.
I'm not huge on UBI over other interventions (I think other things should at the very least be prioritized over it), but is there any reason cash benefits for poverty would be easier to...
They're much easier to administer
I'm not huge on UBI over other interventions (I think other things should at the very least be prioritized over it), but is there any reason cash benefits for poverty would be easier to administer? Wouldn't cash benefits for those in poverty just be the same as UBI but with means testing? Isn't one of the main arguments for UBI that it saves the costs and administrative burden of means-testing?
Cash benefits is the idea that social programs can usually be distilled into straight cash and given as a check. For example, if the US eliminated all food stamps tomorrow and instead had...
Cash benefits is the idea that social programs can usually be distilled into straight cash and given as a check. For example, if the US eliminated all food stamps tomorrow and instead had equivalent monthly child tax credit (read: cash payment), this would be easier to administer and provide families more flexibility. It would be a good thing if we gave people the flexibility to spend the money on things like a flat tire or even building up a small emergency fund.
Annual tax credits or deductions based on income are extremely straightforward means-testing most countries already do. Taking that a step further by giving more money to people in need is a good idea.
I can see cash-based payouts working as replacements for some social programs, food stamps isn't a bad example, but I think attempting to replace, for instance, public healthcare with cash payouts...
I can see cash-based payouts working as replacements for some social programs, food stamps isn't a bad example, but I think attempting to replace, for instance, public healthcare with cash payouts would be disastrous. My understanding is that UBI is essentially the ultimate cash-based payout though (this is part of why I don't actually think it's the best priority atm), so while I can see an argument that just giving cash is easier administratively than something like food stamps, surely that argument doesn't work when comparing it to UBI?
I do definitely agree with giving more money to people in need, to be clear. If anything I'm on the extreme end in that respect. I just interpreted your initial comment as contrasting these types of payouts with UBI.
There's a lot of broad overlap with UBI, but it's different because the idea is replacing (most) cash-like benefits with straight cash payments. In the healthcare space, this wouldn't mean kicking...
There's a lot of broad overlap with UBI, but it's different because the idea is replacing (most) cash-like benefits with straight cash payments. In the healthcare space, this wouldn't mean kicking poor people off free public healthcare, but it might mean replacing insurance subsidies with lower taxes so people can pick and choose where they want to spend money (some people like having more expensive, comprehensive insurance for peace of mind whereas others want the cheapest plan that'll cover severe emergencies and nothing more).
Cash benefits is just simplifying all the overly-complicated subsidies, tax-credits, deductions, write-offs, and weird loan discounts into simply giving people more money to use how they see fit. Of course, it's not perfect for everything. Sometimes you want a particular subsidy to incentivize a particular product or behavior like electric bikes for example.
The overlap with UBI especially comes in when people discuss the impact of UBI and cash benefits on poverty. A lot of the arguments against cash benefits for poor people is parents will quit their jobs to have more babies and stuff. It's good to have studies showing that isn't the case and supporting the idea that we should be giving people more money to lift them out of poverty!
Ah I see, I think I saw you as contrasting them rather than comparing them in your initial comment, if that makes sense. I think the devil's in the details with replacing public benefits with...
Ah I see, I think I saw you as contrasting them rather than comparing them in your initial comment, if that makes sense. I think the devil's in the details with replacing public benefits with straight cash payments (the current US tax system is way too deliberately complicated atm for refunds to be as effective as I think they'd need to be as a mechanism for this, for instance), but I do definitely see specific systems that would be improved upon by just giving people money instead (I used to work at a grocery store and I have such an extreme hatred for all the limitations on what you can use food benefits for). I just think I misinterpreted where you were coming from initially!
The US used to pay a monthly child tax credit until very recently, and it had the expected effect of pulling millions of people out of poverty. Taxes are complicated, but it's pretty simple to...
The US used to pay a monthly child tax credit until very recently, and it had the expected effect of pulling millions of people out of poverty. Taxes are complicated, but it's pretty simple to automatically make benefits proportional to the final number on your taxes.
Oh yeah I'm all for tax credits like that, I just think that simplifying the fucked up US tax system would make tax credits like that way more equitable.
Oh yeah I'm all for tax credits like that, I just think that simplifying the fucked up US tax system would make tax credits like that way more equitable.
The US tax system is a good example of why I dislike scattershot policies with too many random carve outs and benefits. Even if tax returns were further simplified, there are still too many random...
The US tax system is a good example of why I dislike scattershot policies with too many random carve outs and benefits. Even if tax returns were further simplified, there are still too many random deductions and credits.
Maybe Minori was talking about it in the context of financing? Just a guess, but I imagine UBI – at least on paper, not necessarily the net result – needs higher government spending to be possible.
much easier to administer
Maybe Minori was talking about it in the context of financing? Just a guess, but I imagine UBI – at least on paper, not necessarily the net result – needs higher government spending to be possible.
Cash benefits =/= UBI Cash benefits are programs where people are given $X/month instead of special credits that are only usable on beef and dairy, bicycles, education, etc. The benefit is in the...
Cash benefits =/= UBI
Cash benefits are programs where people are given $X/month instead of special credits that are only usable on beef and dairy, bicycles, education, etc. The benefit is in the simplicity of administration. Cash benefits trust that people in poverty know best what they need money for. It's also significantly harder for companies and special interest groups to lobby for indirect handouts by way of targeted government benefits.
So, the study has shown that people who receive UBI did not see any improvement in the quality of their employment, but did decrease their labor participation rate by about 2%. The way that I read this is that this UBI study didn't create better jobs for participants, nor encourage them to find better ones, but it did let the participants spend less time toiling at a shitty job and spend more time living their life.
Is this not the outcome that we want? As automation makes human labor less necessary, we want people to spend less time toiling and more time enjoying life.
Moreover, the 2% decrease, in a sample size of 1000, is almost nothing. To put it in context, if you apply that to an individual 40 hour work week the person would work 48 less minutes. That strikes me as a strong argument against one of the most common criticisms of UBI: That people won't contribute.
Based on this study the vast majority of them will contribute the same amount as before, and have better lives while doing it
This study shows zero evidence that people will have better lives from the increased amount of money. I know that sounds ridiculous, but the authors didn't bother measuring happiness because previous studies show that cash benefits don't make people happier as I mentioned here.
I looked at the first study in your linked post. The program gave families of 3 or more people $400/month. It resulted in an increase in food consumption and a subjective improvement in financial state.
That makes sense. That it didn't result in self reported mental health improvements doesn't seem surprising. $400/month is no doubt significant for the participating families, but I wouldn't expect it to be life changing. Also, this was during the pandemic, nationally people's mental health didn't tend to improve as it went on.
The way I read your post, the implication is that cash benefits don't improve happiness and that it's settled science. But, on the contrary, a large body of evidence associates more money with increased happiness. The debate seems to be around whether or not there is a plateau at a certain income level or not. Many studies have found one, but some have found that instead happiness continues to increase well into the millions of net worth. You can google "does money buy happiness" or similar to find some of the studies.
You need more than $400/month to see results based on the income levels mentioned in the studies I've seen.
I agree more money makes people happier, but that's totally separate from "should we do UBI?" Especially if we wanted to reduce income inequality, UBI is obviously worse than a program that gives more money to people that earn less.
Unfortunately, at the level of more than $400/month, we're getting into the territory of massive benefits that are more inline with earned pensions or disability payments. That's not a trivial amount of money. Governments can only do so many things, and I'd argue they should focus on programs with the best cost-benefit ratio.
I also get your point about mental health, but the study is comparing within the study population, not the broader public. If UBI had a protective benefit to mental health, we would be able to easily tell by comparing the control group's well-being versus the group that received more money.
Sorry, but your assumptions and conclusions read as though they’re from such an incredibly anti-UBI place that I’m not sure the exchange is helpful. The thread looks to me like at least some folks are making statements where the sample size and dollar amount and timeline are okay when something supports their opinion, but not when it doesn’t.
I also want to challenge the veracity of any conclusions about UBI at all based on a few thousand people getting $400 for a few months during the pandemic.
As for the costs of UBI, IMO arguments rooted there don’t belong in this discussion at all. This is about “does it work”, not “how or who pays for it” - that’s changing the topic into an area where someone who has prejudged UBI feels like they might have a better argument.
Try and be intellectually honest in arguments I guess is what I’m going for here.
I’m kind of interested in finding out the origins of this paper- who funded it and the background of the authors, because it smells funny to me.
I apologize if I've come across as uncharitable. I care a lot about UBI and cash benefit programs because I think they could be extremely effective measures to combat poverty, but I simply haven't seen the evidence supporting truly universal basic income as doing all the things proponents say it should do. I'm strongly supportive of increased benefits that actually help people, so I've tried to stay up to date on the research of what government benefits actually help people.
No apology needed. I can’t claim to know too much about comparing programs and effectiveness or the studies done. I do feel like I have a lifetime of experience with criminalizing and punitive attitudes toward poverty and the poor though… and faux academic writing funded in bad faith. This is a bit of a hot-button issue for me currently I’m realizing, as I’m up to my eyeballs in elderly people watching cable news and wanting to talk election… so if I was aggressive, I also apologize.
I might have to get more strict with my media until the next president is fully placed in office.
There are other benefits too. If this money comes from taxing income of high earners or wealth in general, then this money is way more likely to be spent and stimulate the crap out of local economy. We want to stimulate producing actual stuff and actual services because that means more taxes and more money for public services. The rich will keep it in capital markets where we have reached the point of diminishing returns ages ago.
Selling it as a re-distributive program to boost economies is good. I've mostly heard that argument as a secondary or even incidental effect since most of the focus I've heard is around reducing hours worked or increasing education, etc.
„Helicopter money” is sometimes used to describe direct money transfers like UBI or COVID-era stimulus in the US. UBI trials probably don’t focus on this kind of impact because it’s researched quite well. It’s super effective because such money is usually spent quickly and locally. You don’t even have to be a modern monetary theorist to recognise those benefits.
In 2016 where I live we have implemented quite high child support subsidy which is a quasi-UBI essentially. Classical economists were saying we’d never be able to support expenditure this high and we’d see enormous spike in inflation. Neither has materialised (until supply shock inflation due to pandemic and second invasion of Ukraine but that’s an external factor beyond control).
This is what actually happened. We’re now one of the fastest growing economies and despite doom and gloom inflation remained stable and debt to GDP ratio decreased.
That's a really good example, thanks! Child support subsidies are a great policy since they encourage children and help support working parents. They're a little different from giving money to everyone, even rich dual income couples.
Unfortunately this programme has been proven to have negligible impact on birth rates and we’re still leading top depopulating countries. There are also no income criteria so rich can still benefit from this money. It definitely decreased child poverty on top of economic benefits I mentioned though.
Did the credit keep the birth rate higher than it would have been without the credit? As Poland has gotten wealthier, birth rates would presumably continue dropping as they have in other countries. Basically, is it possible the birth rate would be worse without the credit?
It’s hard to tell but given the scale of the program and depopulation rate it seems to be at least ineffective. We might going on a South Korean path where profits from that high growth are not redistributed equally enough.
The question is why would we use UBI or guaranteed income if that's the goal? Wouldn't it be better to just mandate more national holidays be observed by large employers or increase paid leave options for parents?
We could do all of those things. Though I'll note that low-paying jobs usually don't allow leave for national holidays. You'd have to mandate it.
But why do all of the things when we could focus on doing the most impactful things? The more policies and special rules you have, the messier things get. If the goal is making sure poor people have time off, we should mandate they get paid time off as many places have.
I don't know if it's true that more policies means things are worse. Maybe "messier"- I think in this context that's subjective.
Regardless, we're skipping the hardest step, which is to transition the goal to "let people have a reasonable amount of free time" from "make the most possible profit".
Governments can only write bills for and manage so many different policies. The more programs you want to run, the more likely there are to be hidden inefficiencies and missed opportunities because attention is spread thin (see: every big corporate bureaucracy). It's harder to study and improve 50 quirky policies compared to 4 really solid ones.
Every country I can think of already has national holidays. Mandating additional paid time off doesn't seem like that far of a step considering how many states and countries have done it. Exactly how much or how little time off everyone should have is much more contentious.
America has national holidays but not in the sense that businesses are required to offer paid time off on those days. Additional holidays in America would just be words unless paid leave was mandated.
While I agree that political will is finite, I think trying to solve complex problems with simple solutions has its own pitfalls.
Stealing highlights from another site:
I'm sure people will argue that they just aren't being given enough money, but $1000 a month is honestly a lot. That it just increases leisure time and doesn't noticeably improve most anything else continues to sway me against UBI.
However, I'm still strongly supportive of cash benefits for poverty. They're much easier to administer, and we have much stronger experimental evidence in favour of their efficacy from Mexico, South America, and parts of Africa with GiveDirectly.
Were they happier or healthier?
Silly socialist! Don't you know humans' only value is economic efficiency? Next you're going to tell me that some things can have value without being quantifiable! You'll never make numbers go up thinking that way.
Edit: in case you're keeping count, this is absolutely a strawman. No arguments there. Consider it an expression of my frustration rather than an argument.
This feels like an uncharitable take on the study. I don't expect everyone to read such a long report, but they didn't measure this because the focus of the study was on education and quality of jobs.
One of the main arguments for UBI has always been "people will quit their toxic jobs and find ones that make them happier!" So they did a high-quality study which ended up finding no noticeable effects on employment quality.
The authors didn't measure this because it's already well reported in the literature that cash benefits neither improve nor worsen mental or physical health (study 1). As an outrageous example to prove my point, people aren't even happier when they get thousands of dollars in medical debt paid off! In fact, some people somehow have worse mental health outcomes after having their medical balances taken care of (study 2).
(cc: u/Promonk)
Thank you for providing sources and arguments to the discussion, but I have some critisisms of my own.
The main point of a UBI is to give people a more reliable income, which gives more breathing room in their spending. This in turn should improve mental wellbeing (as people have less stress about finances) and have the financial freedom to switch jobs or work less. Especially long-term constant stress is terrible for someones health and decision-making ability.
A temporary 400 dollar food stamp is not realiable over time and is not enough money to significantly change someones financial situation, it is made to keep people afloat, but only just about.
Debt forgiveness does not help in this regard either, as it does not change peoples income. In fact, if nothing changes, a person could just as easily fall back into debt.
So in short: cash does not make people happier, but a stable income means less financial worries and empowerement to change jobs or working hours, which absolutely makes people happier.
This is supported by one of the most well-known studies on UBIs: the Finnish study
If you want to learn more about UBIs, I recommend Utopia by Realists by Rutger Bregman.
Do we have any other studies that support universal basic income? That Finnish study only had a benefit of 560 euros per month for one year which is pretty short. They also only gave money to people that had recently received unemployment benefits which is a group that would presumably benefit from more financial aid. That's completely different from completely universal basic income. I'm strongly supportive of cash benefits for people in financial distress or poverty like that Finnish study provides evidence for!
Also, the lack of mental health benefit from writing off medical debt is just another example of why it would be better to simply give needy people cash and let them decide how to spend it. It's easy to imagine a parent that would be happier having enough money to buy a nice birthday cake for their kid rather than having all their medical debt paid off.
For me this study is supportive of UBI, as the main benifit of UBI is that it gives both poor and lower to mid income people money with no bureaucratic nonsense. If you only want to give money to the needy, you need to quantify what "poor" and "needy" are, and that almost always means that people have to jump through hoops to get support and it also introduces a poverty trap. A UBI does not have that problem.
I think it’s important to distinguish between studies done in developed countries and those done in poorer countries. Here is GiveDirectly’s summary of a 2016 study done in Kenya:
That’s probably because the people there were a lot poorer to begin with. It’s an efficient way to help people if you’re indifferent to who benefits.
(GiveWell recommends other charities as more efficient than that, but they use cash transfers as a benchmark.)
Good point. The baseline poverty level definitely makes a big difference, and the study results do vary by country. That's part of why I cited GiveWell as a potential counter example to this study.
They were not food stamps. It was $400 on a visa debit card.
Fair point, thank you for clarifying that. The aid was still temporary, which still has all the issues previously mentioned.
From study 1: doesn’t it show that those who received payments reported marginally better health? It shows that those who were in the treatment group reported their health as fair to poor less frequently than the control. Although they reported as more anxious/depressed by a tiny (perhaps statistically insignificant) margin.
This study does strike me as difficult due to the confounding factor of the ongoing pandemic. Trying to measure health changes from a UBI pilot when there’s a novel pandemic - including lockdowns and waves terrible news - might be hard. Yes, there’s a control group. But if everyone’s feeling especially anxious and depressed $400/month might not impact that.
We'd probably agree that rich and poor people were affected by the pandemic differently. It's possible that $400/month wasn't a large enough amount to make a difference to mental health, but we don't really have the evidence to support this idea.
It's also possible that there's something fundamentally different about the mental health effects of earned income versus a guaranteed income. As someone else pointed out, rich people are, generally, happier with their wealth.
Generally agree.
I suspect that someone who has grown up in poverty to a family that's been in poverty for generations might need so much more than just a little breathing room to start closing the health/wealth gap. Perhaps it's like working yourself out of depression. From experience I can say that even once you start doing the right things (exercising, healthy eating, socializing, reducing drug use) you won't see much improvement for months. But suddenly things start improving.
Interestingly, in the first study you linked, the one which claims no improvement in self-reported mental or physical health, the researchers found a statistically significant decrease in "financial distress" in the treatment group. Food security spiked for the treatment group at first, but returned to parity with the control over time, which suggests that people had other more pressing concerns at the time than food. Thinking back to the high pandemic, I can see that.
In fact, most indicators showed net positive statistical changes for the treatment group nearly across the board, with the exceptions being food insecurity (beyond the initial spike), school attendance rates, and self-reported physical/mental health, which all showed no statistically significant changes between groups.
The study itself is interesting, but I'm not sure it's the best thing to base a generalization on, as the researchers themselves acknowledge that the study was performed under unique circumstances, coinciding as it did with the height of the COVID pandemic and its attendant economic chaos.
As for the other papers you've linked, including the OP, both are working papers for the NBER. They are not intended to make definitive statements about the subjects they discuss, they're intended to direct researchers to areas the authors feel need further examination. From the first page of the paper:
I had never heard of the NBER before you linked their working papers, which isn't surprising since I'm not an economist. I have no particular reason to doubt their credibility, but neither am I going to take any particular figure in their working papers as gospel. They're pretty explicitly saying not to do that by publishing it as a working paper.
You might want to pull the reins a bit on outrageous examples to prove your point, is all I'm saying.
I could still see this being potentially worth it by preventing other things later on: being less likely to experience stress- or health-related leaves of absence, for example.
It's a nice thought, but that theory hasn't been supported by any studies on cash guarantees. If that was the case, they would have noticed more difference in the number of hours worked over the course of this years-long study.
The period of this study was three years. It's possible this manifests over a longer term than that.
Depending on how pessimistic you were going in, this could be seen as good news. I’d expect that an extra $1000 a month might result in people being more likely to quit a job or less likely to start a new job when it’s a close decision. And it seems there’s some effect, but not that much.
Another question, though: when a close decision goes the other way, is it a better decision? I think there’s no way of knowing without understanding the situation. But without any other information, I like to assume that people make better decisions when under less financial pressure.
I'm not huge on UBI over other interventions (I think other things should at the very least be prioritized over it), but is there any reason cash benefits for poverty would be easier to administer? Wouldn't cash benefits for those in poverty just be the same as UBI but with means testing? Isn't one of the main arguments for UBI that it saves the costs and administrative burden of means-testing?
Cash benefits is the idea that social programs can usually be distilled into straight cash and given as a check. For example, if the US eliminated all food stamps tomorrow and instead had equivalent monthly child tax credit (read: cash payment), this would be easier to administer and provide families more flexibility. It would be a good thing if we gave people the flexibility to spend the money on things like a flat tire or even building up a small emergency fund.
Annual tax credits or deductions based on income are extremely straightforward means-testing most countries already do. Taking that a step further by giving more money to people in need is a good idea.
I can see cash-based payouts working as replacements for some social programs, food stamps isn't a bad example, but I think attempting to replace, for instance, public healthcare with cash payouts would be disastrous. My understanding is that UBI is essentially the ultimate cash-based payout though (this is part of why I don't actually think it's the best priority atm), so while I can see an argument that just giving cash is easier administratively than something like food stamps, surely that argument doesn't work when comparing it to UBI?
I do definitely agree with giving more money to people in need, to be clear. If anything I'm on the extreme end in that respect. I just interpreted your initial comment as contrasting these types of payouts with UBI.
There's a lot of broad overlap with UBI, but it's different because the idea is replacing (most) cash-like benefits with straight cash payments. In the healthcare space, this wouldn't mean kicking poor people off free public healthcare, but it might mean replacing insurance subsidies with lower taxes so people can pick and choose where they want to spend money (some people like having more expensive, comprehensive insurance for peace of mind whereas others want the cheapest plan that'll cover severe emergencies and nothing more).
Cash benefits is just simplifying all the overly-complicated subsidies, tax-credits, deductions, write-offs, and weird loan discounts into simply giving people more money to use how they see fit. Of course, it's not perfect for everything. Sometimes you want a particular subsidy to incentivize a particular product or behavior like electric bikes for example.
The overlap with UBI especially comes in when people discuss the impact of UBI and cash benefits on poverty. A lot of the arguments against cash benefits for poor people is parents will quit their jobs to have more babies and stuff. It's good to have studies showing that isn't the case and supporting the idea that we should be giving people more money to lift them out of poverty!
Ah I see, I think I saw you as contrasting them rather than comparing them in your initial comment, if that makes sense. I think the devil's in the details with replacing public benefits with straight cash payments (the current US tax system is way too deliberately complicated atm for refunds to be as effective as I think they'd need to be as a mechanism for this, for instance), but I do definitely see specific systems that would be improved upon by just giving people money instead (I used to work at a grocery store and I have such an extreme hatred for all the limitations on what you can use food benefits for). I just think I misinterpreted where you were coming from initially!
The US used to pay a monthly child tax credit until very recently, and it had the expected effect of pulling millions of people out of poverty. Taxes are complicated, but it's pretty simple to automatically make benefits proportional to the final number on your taxes.
Oh yeah I'm all for tax credits like that, I just think that simplifying the fucked up US tax system would make tax credits like that way more equitable.
The US tax system is a good example of why I dislike scattershot policies with too many random carve outs and benefits. Even if tax returns were further simplified, there are still too many random deductions and credits.
Maybe Minori was talking about it in the context of financing? Just a guess, but I imagine UBI – at least on paper, not necessarily the net result – needs higher government spending to be possible.
Cash benefits =/= UBI
Cash benefits are programs where people are given $X/month instead of special credits that are only usable on beef and dairy, bicycles, education, etc. The benefit is in the simplicity of administration. Cash benefits trust that people in poverty know best what they need money for. It's also significantly harder for companies and special interest groups to lobby for indirect handouts by way of targeted government benefits.
I see, thank you for the explanation.
I figured if they meant "cheaper" they would have just said so 🤷