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Giving Compass' Take:
• Kelsey Piper reports that a universal basic income program in Kenya proved to be an effective buffer during the COVID-19 pandemic.
• What role can donors play in supporting research and implementation of universal basic income?
• Read about Alaska's UBI success.
Several years ago, researchers in Kenya decided to study the effects of a universal basic income (UBI) trial on people’s wellbeing. Some 6,000 recipients in a 12-year trial beginning around 2017 received 75 cents a day — not much, but enough, their research found, for people to be less food-insecure and more likely to start a business. Others received payments for just two years (that ended in December 2019), and still others received a lump sum payment.
In early 2020, the coronavirus hit. In response, governments like Kenya’s imposed harsh lockdowns that sought to prevent the virus’s spread but that also had devastating impacts on the economy.
That prompted researchers to ask: How does receiving a UBI (or having received a UBI up until recently) affect how communities are hit by a serious economic setback like this one? The researchers decided to check back in on the households in their UBI trial. This week, Nobel Prize-winning MIT economist Abhijit Banerjee, GiveDirectly’s Michael Faye, the late Princeton economist Alan Krueger, UCSD’s Paul Niehaus, and MIT Sloan’s Tavneet Suri released a working paper — meaning it has not yet undergone peer review — on what they found.
Mostly, they found encouraging news: Even a very small UBI can really help with a deeply difficult situation. The lockdown in Kenya to reduce the spread of the coronavirus was hard on rural communities like those in the UBI study, which were already quite poor. The social safety net is limited, and people go hungry even in good times. When people earned less money, they were more likely to have to give up necessities. Food insecurity was widespread — 68 percent of households in the control group reported experiencing hunger in the last 30 days.
But the UBI measurably improved things — not just for the people still receiving it but also in the group where the last payments stopped in December. “Recipients were 4.9-10.8 percentage points less likely to report experiencing hunger,” the paper finds, and “3.6-5.7 percentage points less likely to have had a household member sick during the last 30 days.” Recipients were even less likely to be depressed.
Read the full article about universal basic income in Kenya by Kelsey Piper at Vox.