Revolutionary Results from the World’s Largest Basic Income Experiment

In a groundbreaking development in the field of poverty alleviation and economic policy, the first results from the world's largest Universal Basic Income (UBI) experiment, conducted by GiveDirectly, have emerged.

This large-scale study, which commenced in 2018, involved around 200 Kenyan villages and has been closely watched by economists and policymakers worldwide.

Key Highlights of the UBI Study

Empowerment and Productivity
The UBI initiative dispelled the common myth of "laziness" associated with free money. Instead, the recipients showed increased entrepreneurship, productivity, and income. They invested wisely and did not decrease their work hours or indulge in increased alcohol consumption​​.

Effective Aid Delivery Models
The study compared three methods of fund distribution: long-term UBI, short-term UBI, and a large lump-sum payment. It found that both a substantial one-time payment and a long-term UBI commitment (12 years) were highly effective, with the lump sum enabling significant investments and the long-term UBI fostering savings and risk-taking behavior​​.

Impact of Lump-Sum Payments
A one-time payment of approximately $500 was shown to be more effective across most measures than distributing the same amount over 24 months. This finding holds critical implications for how governments allocate limited resources for poverty alleviation​​.

Long-Term UBI's Influence
Recipients who knew they would receive 12 years of UBI demonstrated a greater propensity for saving and investment, behaving differently than those with shorter-term income horizons. This suggests the effectiveness of long-term financial security in promoting economic stability​​.

Policy Implications
The study suggests that for poverty reduction and wealth creation, policymakers should consider strategies beyond short-term, small monthly payments. The transformative potential of long-term UBI or large lump sum payments was significantly more evident, indicating the need for a reevaluation of existing cash transfer programs​​.

Future Research and Global Context
While the study offers profound insights, further research, especially in high-income countries, is needed to explore the applicability of these findings in different economic contexts. Upcoming surveys at the 7 and 12-year marks will provide deeper insights into the long-term effectiveness of the various UBI models​​.

This study marks a monumental step in understanding poverty alleviation strategies and could reshape how governments and organizations approach economic assistance globally.

The positive outcomes challenge long-held assumptions about cash transfers and suggest new pathways for empowering those in poverty.

Source: GiveDirectly and Vox