Tavneet Suri on Universal Basic Income

Social Science Bites

Here's a thought experiment: You want to spend a reasonably large sum of money providing assistance to a group of people with limited means. There's a lot of ways you might do that with a lot of strings and safeguards involved, but what about just giving them money -- "get cash directly into the hands of the poor in the cheapest, most efficient way possible." You and I might prefer that, since we, of course, are reputable people and good stewards and understand our own particular needs. But what about, well, others?

Economist Tavneet Suri has done more than just think about that; her fieldwork includes handing out money across villages in two rural areas in Kenya to see what happens. Her experiments include giving out a lump sum of cash and also spreading out that same amount over time. The results she details for host David Edmonds in this Social Science Bites podcast are, to be frank, heartening, although the mechanisms of disbursement definitely affect the outcomes.

Despite the good news, the idea of a universal basic income is by no means a settled remedy for helping the poor. For one thing, Suri says, "it's super, super expensive. It’s really expensive. And so, the question is, “Is that expense worth it?” And to understand that I think we need a few more years of understanding the benefits, understanding what people do with the incomes, understanding whether this can really kickstart these households out of poverty."

And perhaps the biggest question is whether the results of fieldwork in Kenya is generalizable. "I would love to do a study that replicates this in the West," she says. "The one thing about the West that I think is worth saying that's different is you wouldn't add it on top of existing programs. The idea is you would substitute existing programs with this. And that to me is the question: if you substituted it, what would happen?"

Suri is the Louis E. Seley Professor of Applied Economics and at the Massachusetts Institute of Technology's Sloan School of Management. She is an editor at the Review of Economics and Statistics; co-chair of the Agricultural Technology Adoption Initiative at the Abdul Latif Jameel Poverty Action Lab, known as J-PAL, at MIT; co-chair of the Digital Identification and Finance Initiative at J-PAL Africa; a member of the executive committee at J-PAL; and a faculty research fellow at the National Bureau of Economic Research.