Originally shared by Kam-Yung Soh
More on UBI experiments. The fact is, UBI needs lots of time and lots of participants to have a statistically significant effect. In the end, the costs of implementing UBI may still outweigh its benefits. “The Kenya experiment is one of a handful of UBI trials in various stages of development around the world. Finland has already begun a trial, as has Ontario in Canada. Stockton, California, is planning to roll out its own experiment later this year. Although the concept isn’t new — it was first proposed by Enlightenment philosophers — it remained a fringe idea until the past few years, and governments are now starting to take it more seriously. Interest in the idea grew in the aftermath of the 2008 economic crisis and because of endorsements from Silicon Valley tech gurus such as Elon Musk.
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For economists and public-policy scholars, the current interest in UBI provides an opportunity to conduct rigorous trials to determine whether it will produce measurable benefits. But translating a grand economic theory into workable policy is far from easy. Almost all trials have involved a small number of people or lasted just a few years, which limits their power. And there is no clear definition of success; researchers try to balance measuring potential gains in one area, such as health care, with potential offsets in another, including education and labour-force participation.
But for the growing chorus of voices calling for data-driven policy, trials such as the one in Kenya are the only way to see whether UBI actually works. “This is one of the first rigorous randomized control trials of UBI,” says Suri. “This is our chance to understand UBI and its impacts.”
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Over time, the trials could generate data on the costs and benefits of UBI schemes, such as whether the initiatives reduce health-care expenditures. But Martinelli thinks that the data will show that it will cost too much to make a programme effective. “An affordable UBI is inadequate, and an adequate UBI is unaffordable,” he says.
But even a clear win in these trials won’t necessarily indicate that UBI would work in practice, says economist Damon Jones at the University of Chicago in Illinois. Because they are relatively small and most of the funding comes from private sources, the trials won’t provide a sense of whether governments could afford a big public programme or whether citizens would be willing to fork out extra taxes to fund them. “Medicine can be scaled up, but this isn’t as easy,” says Jones. A new cancer drug might extend lifespan by 3 months, which stays true whether 10 people take the drug or 10,000. In a UBI trial, 10 people receiving cash will have a very different impact on a community compared with 10,000.
Jones cautions that this doesn’t mean the UBI trials shouldn’t be done or that they will produce meaningless data, just that even the best-designed studies have inherent limitations.
Regardless of the outcomes, the trials will have an ongoing impact because they can identify potential flaws in the process, help researchers refine the questions they ask and give policymakers some of the answers they crave. If the trials succeed, “it wouldn’t just be an outlier in social policy, it would be a minor miracle”, Reich says.”