Every time you want to evaluate results from social research, you need to ask yourself two questions:
1. Are the results internally valid? That is, did the authors reasonably control for factors other than the treatment (in this case, UBI) that could affect the observed results? Turn out, that this is actually difficult to do outside of randomized control trials. Quasi-experiments and natural experiments all lack random treatment assignment. This leads to biased estimates and wrong conclusions.
2. Are the results externally valid? That is, to whom do the results apply? Most UBI experiments are done in contexts that are different than the US (if you are interested in what would happened if UBI becomes law in the US). Local factors could impact the way that people react to UBI. Because these factors do not apply to the US, the study results do not readily translate to the US.
For example, the article cites this NBER working paper[1] as proof that UBI has positive impacts on unemployment. The article uses a difference-in-differences model with a systemic control group to get to a causal estimate of receiving dividends from the Alaska Permanent Fund. This boils down to compare changes in employment between Alaska and states that had similar employment trends during the pre-treatment period. Their analysis seem to be sound and they conduct multiple robustness checks.
As far as external validity, how similar is Alaska to the rest of the US? Would results from that setting translate to California, or Mississippi, or New York?
I'm not an economist, but when I once asked examples of good econometric methods to study especially related to synthetic control. I was given just that Marinescu's Alaska paper you are referring to.
They needed a counterfactual for exactly one state. They create "synthetic Alaska" elsewhere in in the United states to make the comparison valid. Even if the researchers did not intent it that way, the selection methodology selected areas in the continental US that have geographic featurs similar to Alaska. It's really fine paper and good methodology.
Another fine point about basic income in the paper is that it makes difference between tradeable businesses (can be are exported) and non-tradable businesses (stays local). Employment rates in non-tradeable business don't change. By contrast part-time work did increase, and employment fell in companies that sold goods outside Alaska (this has implications for wider applicability I guess).
From an armchair perspective, there are significant ways in which Alaska is behind the mainland US, so it's encouraging to see that the APF distributions provide a positive impact.
I would suspect that the results would be broadly applicable to underdeveloped and rural areas, so of the three examples, there are certainly areas in rural north California, rural Mississippi, and New York (probably upstate) that would benefit.
I think extending it to apply to urban or highly developed areas would be pretty questionable, though, I'd guess Manhattan is not going to behave similarly enough to draw any conclusions.
About point 1: Since we are dealing here with humans, this criteria is almost impossible to satisfy. You cannot enroll people in a control trial if you know this has a chance to make their lives worst.
> This leads to biased estimates and wrong conclusions.
It does not necessarily leads to 'wrong' conclusions. In social sciences, you have to deal with a truth level that will never yield 100% certainty.
To your points, I'm sure communism comes out looking quite incredible in a limited-time trial with a small population. It's just that dang problem with scaling it up.
Yes, this is unfortunately pretty lazy research used to push an agenda.
Related to that, the main claim: the 40% reduction in crime (no link, why?) is in Namibia. Is there anything about Namibia which makes it different from a developed economy like the US?
I know it comes off as pedantic to complain about such stuff, but there's gotta be higher standards for evidence, otherwise you don't really trust your own argument.
"a quora member answered when asked about the UBI"
And at that moment, any semblence of legitimacy disappeared...
The main question about UBI is who pays for it and how. In the UK, a back-of-a-napkin calculation showed that all current benefits equally divided into a single BI would be around £4K, way below anything that most people would consider enough to live on.
So to get a BI of £12K, average taxes would have to go up by £8K per person. And since about 2/3 of the adult population are taxpayers, that gives £12K per taxpayer, which balances the payout they'd receive from BI. People with above average incomes would pay into BI, and those with below average incomes would net from BI.
>In the UK, a back-of-a-napkin calculation showed that all current benefits equally divided into a single BI would be around £4K,
Does that back-of-a-napkin calculation include the savings you'd get by shutting down most of the government bureaucracy involved in administration of current benefits and not paying salaries to all those government workers? In any country, a huge amount of the money spent on benefits are used just for administration. With UBI, you can get rid of all those workers and use the money for UBI instead.
It would be possible with a blockchain based system that included a crypto currency. No one would need to be taxed, and in fact current taxes could be dramatically lowered.
How much is the data of a nation worth? For some, it could be incalculable. Not just government for and by the people, but also its data and computations.
The big problem with UBI, aside from how to pay for it, is that it will not survive as either universal or basic once the voters get their hands on it and decide that, say, UBI benefits should be cut for felons, increased for single mothers, indexed to the cost of rent, etc.
In other words, we have a bunch of different welfare standards for people in different situations because that is what succeeds politically, and there is no reason to believe the same impulses that got us our current welfare system won't influence UBI also.
I find this mostly click bait. We should expect results like this or frankly better. Results from one small African village are not globally applicable. The issue is where does the money come from and is it truly universal. All the experiments to date have been of the "we gave free money with no restrictions to X thousand people for Y months and it was great". This is necessary but not sufficient research. We could have huge savings in the US with simplified welfare programs but we shouldn't forget that most of those savings come from firing some number of thousands who now also need UBI and have diminished pension benefits. All of these systems are inter-related and we will have to keep trying things as the financial divide grows.
Furthermore, while there is some overhead associated with administration/policing eligibility/etc., a lot of the social safety net people costs are also roles like social workers, etc., the need of which doesn't go away just because you are now just giving everyone a no strings attached check.
I'm curious to hear how folks, who are more knowledgeable than I and have done more research, reconcile data points like these with the data showing lack of success in places like Finland.[1]
Finland's experiment was not actually a UBI experiment. I mean, originally it was going to be a really big basic income trial... but by the time they finalized it, they’d chickened out and made it basically a tweak to their existing unemployment benefit for a tiny sample of people who were already on unemployment.
So officially there are no results since the experiment is not over. But whatever the results end up being, they won’t say anything about actual UBI one way or the other.
I don’t know anything about the program but it doesn’t sound like it was really UBI at all from this description in the article. If it was a) only available to unemployed and b) only a pilot with 2,000 people then I guess it’s easy to ignore it as a data point. Though maybe that paragraph is poorly worded and it was actually more extensive?
>>> “Finland was considered the first European country to pay a monthly check of $685 to its unemployed between ages 25 and 58. It was considered a pilot program — serving 2,000 randomly selected jobless people — that its founders hoped to expand.”
Edit Additionally Googling for Finland UBI experiment yields countless articles claiming it was neither a failure, nor proper UBI
From a guardian article: "Olli Kangas, an expert involved in the trial, told the Finnish public broadcaster YLE: “Two years is too short a period to be able to draw extensive conclusions from such a big experiment. We should have had extra time and more money to achieve reliable results.”" https://www.theguardian.com/world/2018/apr/23/finland-to-end...
Further: "The scheme – ... – is strictly speaking not a universal basic income (UBI) trial, because the payments are made to a restricted group and are not enough to live on."
I'm still hopeful. Also, what other plan is there to deal with wealth distribution and automation dissolving jobs?
There's really no indication of whether it was a lack of success or not.
If it showed worse health and/or employment outcomes for recipients, that'd be a data point. But the fact that a government cancelled it without any explanation really doesn't say much, except that it's subject to politics.
There ought to be a name for a minimal UBI that can allow people who are normally just scraping by to bridge short periods of unemployment, unexpected expenses etc. £4K wouldn't be much for the average Hacker News reader, but for people on minimum wage it could make a real difference. You can't really call this "Basic Income" though, because that term comes with the build in assumption that it's enough for a person to live pretty comfortably. I've been thinking of this as a "Really Basic Basic Income" ("RBBI"?), but nobody seems to be talking about such a thing.
An issue with that approach is that you may end up giving more $$ than the person could earn from any job they could take, effectively forcing them to stay jobless
I've always thought there should be an essential basics program, where you can always receive an adequate amount of flour, rice, beans, corn, and other basic foodstuffs to survive. I'd also add toothpaste, soap, and other sanitary items.
We can still have food stamp programs that allow people to spend as they please, but the guaranteed floor ensures literally no one need go hungry.
Sticking to basics keeps the costs far lower than trying to subsidize processed foods, and the extent we susbsidize our farmers also subsidizes the program.
Universal Dividend, the idea being that we all are investors in the world around us, particularly in the act of creating the next generation and staying alive to be the workers, consumers, etc. So everyone gets a cut of the general profits.
If one is against this idea, then ask why any investor of money into a company should get money back from it when they did no explicit work for it? If you reject the universal dividend idea, then one, to be consistent, should really reject the idea of investment. Good luck with such an economy.
So instead of the demeaning UBI narrative that people need money to survive, it suggests an uplifting narrative that we are all valuable and that we all get a bit of something back to reflect our useful existence as well as a little something in order to "invest" it into the next act of creating something. It captures the idea that our society is built not just economically and bureaucratically, but also socially. That having neighbors, coworkers, customers is important for economies and governments. These are hard things to support with metrics, etc, so we just decide on a basic level and give it out.
What that level is would be debatable, just as how much an investor makes from dividends or buybacks, is debatable. Since I think the ability to walk away is the most important aspect of freedom and that freedom is an important value, I would want a higher amount than you suggest. But a lower amount would work as well with that label.
Spit ball: What is a mediocre growth return rate? Maybe 4%? So tax wealth at 4% and distribute it across all the citizens. Anyone who can use their wealth to generate more than 4% will see it grow (these are the successful people) while those who cannot will see their wealth dwindle and would be the typical case. This also addresses the wealth inequality issue. Incidentally, at 100 trillion dollars of wealth, this leads to 4 trillion to distribute across the population of say about 330 million leading to about 12,000 dollars a year or so.
This also suggests that the dividend should be applied equally to all people which includes, especially so, children. This is an investment in human existence and a celebration of all of us. Note that this also addresses the concern of a single mother of 3 who would get 12k for herself, 12k for each of her children leading to 48k to take care of her kids, keep them out of poverty, keep them nourished, loved, protected, not abused, etc. It also makes even an unemployed spouse economically useful to have around, but it also enables one to economically walk away from an abusive spouse. This would also lead to the ability to eliminate forced public schooling and much more organic growth of true individuals, free of labels, bullies, adult abuse, and indoctrination.
One might view it as almost a Universal Investment for the young, Universal Income for the middle aged, and a Universal Dividend for the old.
None of those references are primary sources or peer reviewed. I've also personally never heard of "the incomer". I feel like I'd prefer to take those claims with a grain of salt. It feels like a lot of work to try and spend time digging in to whether this is true or not.
It might be true - but this doesn't feel like a credible source.
It might be politically unpopular, but maybe we should just raise taxes and index them for measures of inequality. The GDP per capita of most modern economies can easily handle a basic income sufficient for all but the most expensive cities.
People in expensive cities shouldn't get any more basic income money than people anywhere else; that'll just make more people want to move there. If the nationwide amount isn't enough, the answer is simple: move someplace cheaper. When you have a guaranteed basic income, this should now be possible. This will have two effects: 1) keeping the cost-of-living from continuing to spiral up so much in those cities, and 2) forcing employers in those cities to pay better, since their workforce can more easily move away to someplace very cheap.
That assumes that GDP would not be impacted negatively by the massive tax increase.
I'm sure there are many theories, in both directions, of what would happen to the total tax revenues if you were to raise rates significantly, but it's surely far more complicated that your idea makes it sound.
The work disincentive of basic-income-like cash transfers, in studies so far, is actually somewhat consistent at around 10%. Some papers referencing this approx figure:
The part about people not leaving the workforce is based on a non-peer reviewed working paper arguing that the Alaska Permanent Fund, which pays ~$2000 per person, has not decreased employment: https://www.nber.org/papers/w24312.pdf
I doubt any rational person would quit a job for $2000 a year. Or for a temporal UBI that may last a few years, leaving a gap in their career. I'm curious, does anyone know of any UBI test in which the amount was enough to live decently, and was assured for the lifetime of the recipients?
Ontario recently cancelled their experiment with universal income. Which points me to the fact that even if UBI becomes reality at some point, it's only one government away at any time from being cancelled or adjusted. So your livelihood at any given time is dependent upon government balancing its books. Considering how bad many modern developed governments are at doing this, it gives me little hope of UBI being any sort of good, substantive thing happening in the near future.
I am wondering often with UBI: if everybody gets a certain amount of money. Wouldn't prices just adapt and everything gets more expensive, and there would be the same divide as before? Similar to Scandinavia where prices are very high. What mechanism could prevent this from happening?
[+] [-] pacbard|7 years ago|reply
1. Are the results internally valid? That is, did the authors reasonably control for factors other than the treatment (in this case, UBI) that could affect the observed results? Turn out, that this is actually difficult to do outside of randomized control trials. Quasi-experiments and natural experiments all lack random treatment assignment. This leads to biased estimates and wrong conclusions.
2. Are the results externally valid? That is, to whom do the results apply? Most UBI experiments are done in contexts that are different than the US (if you are interested in what would happened if UBI becomes law in the US). Local factors could impact the way that people react to UBI. Because these factors do not apply to the US, the study results do not readily translate to the US.
For example, the article cites this NBER working paper[1] as proof that UBI has positive impacts on unemployment. The article uses a difference-in-differences model with a systemic control group to get to a causal estimate of receiving dividends from the Alaska Permanent Fund. This boils down to compare changes in employment between Alaska and states that had similar employment trends during the pre-treatment period. Their analysis seem to be sound and they conduct multiple robustness checks.
As far as external validity, how similar is Alaska to the rest of the US? Would results from that setting translate to California, or Mississippi, or New York?
[1]: http://www.nber.org/papers/w24312.pdf
[+] [-] MAXPOOL|7 years ago|reply
They needed a counterfactual for exactly one state. They create "synthetic Alaska" elsewhere in in the United states to make the comparison valid. Even if the researchers did not intent it that way, the selection methodology selected areas in the continental US that have geographic featurs similar to Alaska. It's really fine paper and good methodology.
Another fine point about basic income in the paper is that it makes difference between tradeable businesses (can be are exported) and non-tradable businesses (stays local). Employment rates in non-tradeable business don't change. By contrast part-time work did increase, and employment fell in companies that sold goods outside Alaska (this has implications for wider applicability I guess).
[+] [-] jaggederest|7 years ago|reply
I would suspect that the results would be broadly applicable to underdeveloped and rural areas, so of the three examples, there are certainly areas in rural north California, rural Mississippi, and New York (probably upstate) that would benefit.
I think extending it to apply to urban or highly developed areas would be pretty questionable, though, I'd guess Manhattan is not going to behave similarly enough to draw any conclusions.
[+] [-] 131012|7 years ago|reply
> This leads to biased estimates and wrong conclusions.
It does not necessarily leads to 'wrong' conclusions. In social sciences, you have to deal with a truth level that will never yield 100% certainty.
[+] [-] xienze|7 years ago|reply
[+] [-] aaron-lebo|7 years ago|reply
Related to that, the main claim: the 40% reduction in crime (no link, why?) is in Namibia. Is there anything about Namibia which makes it different from a developed economy like the US?
I know it comes off as pedantic to complain about such stuff, but there's gotta be higher standards for evidence, otherwise you don't really trust your own argument.
[+] [-] lbriner|7 years ago|reply
And at that moment, any semblence of legitimacy disappeared...
The main question about UBI is who pays for it and how. In the UK, a back-of-a-napkin calculation showed that all current benefits equally divided into a single BI would be around £4K, way below anything that most people would consider enough to live on.
[+] [-] bryanlarsen|7 years ago|reply
[+] [-] magduf|7 years ago|reply
Does that back-of-a-napkin calculation include the savings you'd get by shutting down most of the government bureaucracy involved in administration of current benefits and not paying salaries to all those government workers? In any country, a huge amount of the money spent on benefits are used just for administration. With UBI, you can get rid of all those workers and use the money for UBI instead.
[+] [-] russdpale|7 years ago|reply
How much is the data of a nation worth? For some, it could be incalculable. Not just government for and by the people, but also its data and computations.
[+] [-] Spooky23|7 years ago|reply
[+] [-] ahoy|7 years ago|reply
[+] [-] twblalock|7 years ago|reply
In other words, we have a bunch of different welfare standards for people in different situations because that is what succeeds politically, and there is no reason to believe the same impulses that got us our current welfare system won't influence UBI also.
[+] [-] snarf21|7 years ago|reply
[+] [-] moduspol|7 years ago|reply
That aspect never seems to get included for some reason.
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] ghaff|7 years ago|reply
[+] [-] s3r3nity|7 years ago|reply
[1] https://nypost.com/2018/04/25/finlands-universal-basic-incom...
[+] [-] velcrovan|7 years ago|reply
Additionally, Finland had to release a response to the article you linked because of misleading reporting by US media: https://www.kela.fi/web/en/news-archive/-/asset_publisher/lN...
So officially there are no results since the experiment is not over. But whatever the results end up being, they won’t say anything about actual UBI one way or the other.
[+] [-] aidos|7 years ago|reply
>>> “Finland was considered the first European country to pay a monthly check of $685 to its unemployed between ages 25 and 58. It was considered a pilot program — serving 2,000 randomly selected jobless people — that its founders hoped to expand.”
Edit Additionally Googling for Finland UBI experiment yields countless articles claiming it was neither a failure, nor proper UBI
[+] [-] doubletgl|7 years ago|reply
Further: "The scheme – ... – is strictly speaking not a universal basic income (UBI) trial, because the payments are made to a restricted group and are not enough to live on."
I'm still hopeful. Also, what other plan is there to deal with wealth distribution and automation dissolving jobs?
[+] [-] scarmig|7 years ago|reply
If it showed worse health and/or employment outcomes for recipients, that'd be a data point. But the fact that a government cancelled it without any explanation really doesn't say much, except that it's subject to politics.
[+] [-] edgarvaldes|7 years ago|reply
[+] [-] influx|7 years ago|reply
[deleted]
[+] [-] curtis|7 years ago|reply
[+] [-] scryfish|7 years ago|reply
An issue with that approach is that you may end up giving more $$ than the person could earn from any job they could take, effectively forcing them to stay jobless
[+] [-] TomMarius|7 years ago|reply
[+] [-] dahdum|7 years ago|reply
We can still have food stamp programs that allow people to spend as they please, but the guaranteed floor ensures literally no one need go hungry.
Sticking to basics keeps the costs far lower than trying to subsidize processed foods, and the extent we susbsidize our farmers also subsidizes the program.
[+] [-] jostylr|7 years ago|reply
If one is against this idea, then ask why any investor of money into a company should get money back from it when they did no explicit work for it? If you reject the universal dividend idea, then one, to be consistent, should really reject the idea of investment. Good luck with such an economy.
So instead of the demeaning UBI narrative that people need money to survive, it suggests an uplifting narrative that we are all valuable and that we all get a bit of something back to reflect our useful existence as well as a little something in order to "invest" it into the next act of creating something. It captures the idea that our society is built not just economically and bureaucratically, but also socially. That having neighbors, coworkers, customers is important for economies and governments. These are hard things to support with metrics, etc, so we just decide on a basic level and give it out.
What that level is would be debatable, just as how much an investor makes from dividends or buybacks, is debatable. Since I think the ability to walk away is the most important aspect of freedom and that freedom is an important value, I would want a higher amount than you suggest. But a lower amount would work as well with that label.
Spit ball: What is a mediocre growth return rate? Maybe 4%? So tax wealth at 4% and distribute it across all the citizens. Anyone who can use their wealth to generate more than 4% will see it grow (these are the successful people) while those who cannot will see their wealth dwindle and would be the typical case. This also addresses the wealth inequality issue. Incidentally, at 100 trillion dollars of wealth, this leads to 4 trillion to distribute across the population of say about 330 million leading to about 12,000 dollars a year or so.
This also suggests that the dividend should be applied equally to all people which includes, especially so, children. This is an investment in human existence and a celebration of all of us. Note that this also addresses the concern of a single mother of 3 who would get 12k for herself, 12k for each of her children leading to 48k to take care of her kids, keep them out of poverty, keep them nourished, loved, protected, not abused, etc. It also makes even an unemployed spouse economically useful to have around, but it also enables one to economically walk away from an abusive spouse. This would also lead to the ability to eliminate forced public schooling and much more organic growth of true individuals, free of labels, bullies, adult abuse, and indoctrination.
One might view it as almost a Universal Investment for the young, Universal Income for the middle aged, and a Universal Dividend for the old.
[+] [-] nbardy|7 years ago|reply
[+] [-] brightball|7 years ago|reply
[+] [-] Fergi|7 years ago|reply
"Suicides would also decrease, as the most of them are result of depression, which is mostly caused by anxiety about survival."
[+] [-] the-pigeon|7 years ago|reply
[+] [-] AlexC04|7 years ago|reply
It might be true - but this doesn't feel like a credible source.
[+] [-] ndr|7 years ago|reply
He was on SH's show [0] and apparently has a book on it [1]
[0] https://samharris.org/podcasts/130-universal-basic-income/ [1] https://www.goodreads.com/book/show/36204293-the-war-on-norm...
[+] [-] the-pigeon|7 years ago|reply
Worst article I've ever seen so high up on Hacker News.
[+] [-] nobody_nowhere|7 years ago|reply
[+] [-] 3pt14159|7 years ago|reply
[+] [-] magduf|7 years ago|reply
[+] [-] gtCameron|7 years ago|reply
I'm sure there are many theories, in both directions, of what would happen to the total tax revenues if you were to raise rates significantly, but it's surely far more complicated that your idea makes it sound.
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] ProfBernardo|7 years ago|reply
[+] [-] simonsarris|7 years ago|reply
The "strengthened workforce" if you click through is actually about this paper with the alaska fund: https://www.nber.org/papers/w24312.pdf
Not about basic income per se.
The work disincentive of basic-income-like cash transfers, in studies so far, is actually somewhat consistent at around 10%. Some papers referencing this approx figure:
https://www.dropbox.com/s/r19npwc30trejb6/Basic_Income_in_a_...
https://www.dropbox.com/s/oi0kv3vcya9o0ad/The_Rural_Income_M...
https://www.dropbox.com/s/hkd489vcarcrorg/Findings_from_the_...
https://www.dropbox.com/s/5m2k5qzgv699dfe/THE_TOWN_WITH_NO_P...
https://www.dropbox.com/s/dsucn7jone74g65/New_Jersey_Graduat...
(from research on a long BI article I wrote)
[+] [-] JorgeGT|7 years ago|reply
I doubt any rational person would quit a job for $2000 a year. Or for a temporal UBI that may last a few years, leaving a gap in their career. I'm curious, does anyone know of any UBI test in which the amount was enough to live decently, and was assured for the lifetime of the recipients?
[+] [-] devoply|7 years ago|reply
[+] [-] Herodotus38|7 years ago|reply
http://www.bignam.org/Publications/BIG_Assessment_report_08b...
[+] [-] RickJWagner|7 years ago|reply
I think there are a lot of variables that deserve closer study before jumping to conclusions about what might happen in other places.
[+] [-] jackconnor|7 years ago|reply
[+] [-] monochromatic|7 years ago|reply
[+] [-] kire2345|7 years ago|reply