Authors: Abhijit Banerjee, Michael Faye, Alan Krueger, Paul Niehaus, Tavneet Suri

Basic income may not be universal, but strong opinions on it are. They need to be tested.

Give everyone enough money to live on. It is “a bold idea with… the potential to free people to pursue the work and life they choose” or “a senseless act of preemptive self-sabotage,” depending who you ask.

We urgently need to sort out which argument is more accurate. A universal basic income, in the United States or in any other country, would represent a profound change in human social arrangements -- “to the twenty-first century what civil and political rights were to the twentieth,” in the words of India’s Chief Economic Advisor.

Yet debate hinges largely on un- (or under-) tested assumptions about its consequences. Skeptics worry that it will discourage work, for example. Proponents believe it may encourage creativity and risk-taking. As one of us discussed on LinkedIn's Work In Progress podcast this week , the debate is not primarily about whether work and risk-taking are good things, but about how a UBI would affect them.

On issues like these, affluent countries have an opportunity to learn from developing ones. Our labor market structures are in some ways converging towards theirs: while “alternative work arrangements,” including freelancing, contract work and app-related gig work, have grown to 16% of US workers in 2015, the majority of the global poor continue to work a potpourri of “gigs” -- from casual farm work to small shops to cottage production -- to get by. Employment-based solutions to social problems make little sense in such environments.

And developing countries are having their own debate about basic income - not as a remedy to potential future dislocations, but as a solution to the very immediate problem of extreme poverty. India’s government, for example, devoted a full chapter of this year’s Economic Survey to the question.

Basic income could address a number of ways in which current transfer programs fall short. They often deliver benefits to the wrong (non-poor) people, and their delivery of those benefits can be quite porous -- less than half of Indonesia’s massive rice subsidy, for example, reaches the beneficiaries, and fewer than 35% of those who do receive are the poor targeted by the program. In addition, many programs severely distort incentives, as, for example, is the case with India’s electricity subsidies which encourage farmers to pump water out of the ground using free electricity until there is none left. Replacing the problematic, overlapping, and administratively complex hodge-podge of such schemes that many countries now have with a single, universal transfer is an obviously seductive proposition -- if it works.

The time has come to find out. In 2017 we plan to launch the largest and longest evaluation of a basic income yet conducted, studying the effects of a 12-year income guarantee delivered by the NGO GiveDirectly to 26,000 individuals in East Africa using random assignment of villages.

Studying a program of this duration will let us unlock key questions - for example, does making a long term commitment of support matter, or is it simply cash in hand (which is already well-studied) that matters? And the size of the transfers will be enough to enable transformational life changes, not merely incremental improvements in standards of living.

This study launches at a serendipitous moment, with smaller pilot evaluations launching concurrently in the United States, Finland, and Canada. By coordinating research activities across projects, we will be able to gain insight into the extent to which findings from one setting can be generalized to another.

We may learn that a universal basic income is a universally bad idea. We may find it suits the needs and circumstances of some economies but not others. Or we may find it the universally liberating force of which its most ardent supporters dream.







