Update on GiveDirectly’s Universal Basic Income Pilot
Originally published on the GD Blog on 9/22/16
We have good news and more details to share on our work to launch a first-of-its-kind test of a basic income guarantee.
Thousands of donors have come together to support the effort, contributing over $11 million since April and bringing total commitments to the project to $21 million, with $9 million to go to fully fund the study. We’ve also built a strong research team, including Alan Krueger, a former Chairman of President Obama’s Council of Economic Advisers and a professor at Princeton; Abhijit Banerjee, co-founder of J-PAL and a professor at MIT; and Tavneet Suri, also at MIT.
With these milestones reached, we are now preparing to begin payments to an initial pilot village in late October. This pilot will test the operational details of the model and also generate qualitative insights which we will then feed back into the ultimate quantitative evaluation.
We plan to launch the full study across two counties in rural Kenya. Kenya is an attractive location in part because of our strong team and infrastructure in place there, and also because the Kenyan government has been a regional leader in the use of cash transfers for social protection. We also expect regulation of nonprofit organizations in Kenya, as well as overall political stability, to remain relatively favorable in the upcoming decade, though of course we cannot predict the future with certainty. Within Kenya we will be working in one county in which we have historically operated without issues (including near-100% participation rates) and one new county.
The study will include three treatment arms and one control arm. Recipients in the first treatment arm will receive a long-term basic income, guaranteed for 12 years. The transfer size for the first treatment arm will be roughly $0.75 (nominal) per adult per day, delivered monthly. Recipients in the second arm will receive a short-term basic income, or the same payment stream guaranteed for two years. Recipients in the third arm will receive a lump sum payment equal to the net present value of the payments in the second arm.
Comparing the first and second arms will shed light on how important the guarantee of future transfers is for outcomes today (e.g. taking a risk like starting a business). The comparison between the second and third arms will let us understand how breaking up a given amount of money affects its impact.
The overall scale of the project remains incredibly ambitious: if fully funded, it will deliver transfers to over 26,000 individuals, including 6,000 receiving the full 12-year basic income transfers. This breaks down into 40 villages in the first treatment arm and 80 each in the other two, with roughly 120 to 150 individuals per village. Given this scale, we have reasonably good odds of detecting impacts not only on individuals, but also on village-level markets.
Of course, pulling this off depends on you.
If you haven’t already, consider joining us in funding this largest basic income study in history.
At a minimum, we will make the lives of tens of thousands of very poor people meaningfully better; at best, we will produce desperately needed evidence that changes the way the world thinks about ending poverty.