WE ALL KNOW WHERE WE'RE HEADED:

In 2017, a team of researchers - Abhijit Banerjee, Michael Faye, Alan Krueger, Paul Niehaus, and one of us (Suri) - in collaboration with Innovations for Poverty Action and GiveDirectly, began a randomized evaluation in Kenya to test the effect of a digitally transferred UBI. The team focused on two low-income counties, Siaya and Bomet, and evaluated three distinct UBI designs: a large lump sum, equivalent to approximately $500 (the "lump-sum arm"); a payment of $0.75 per day for two years, equivalent to about $500 (the "short-term arm"); and a payment of $0.75 per day for 12 years (the "long-term arm"). Payments were made to each adult over the age of 18 in the assigned villages.

When the pandemic hit Kenya in 2020, the team quickly realized that they needed to understand whether this UBI was helping people weather the crisis. So, with funding from J-PAL Africa's Digital Identification and Finance Initiative, they conducted phone surveys of the households participating in the program. By this point, the lump-sum and short-term arms were complete; the long-term arm was ongoing.

The team found that the UBI improved households' food security and physical and mental health, relative to the comparison group of households that did not receive the transfer. UBI recipients also reduced their social interactions, possibly because of the pandemic and perhaps because they did not need to rely on friends and relatives as much during the hungry season (though this is speculative at best). This may have lessened the burden on local public-health systems as UBI recipients were less likely to fall ill.

Hunger was widespread in the two counties the team studied. But whereas 68% of people in the comparison group reported experiencing hunger in the past 30 days, UBI recipients were 5-11 percentage points less likely to do so. This effect was significantly larger for people in the long-term arm, who expected to continue receiving transfers.

UBI recipients were also 4-6 percentage points less likely to report that a household member had been sick during the past 30 days, as compared to 44% in the comparison group. And while 29% of people in the comparison group had recently sought medical attention at a hospital, UBI beneficiaries were 3-5 percentage points less likely to do so, because they were less likely to be sick.

Tweet   @brothersjudd