LogFAQs > #885894794

In the mid-1970s, the tiny Canadian town of Dauphin ( the %u201Cgarden capital of Manitoba%u201D ) acted as guinea pig for a grand experiment in social policy called %u201CMincome.%u201D For a short period of time, all the residents of the town received a guaranteed minimum income. About 1,000 poor families got monthly checks to supplement their earnings.

Evelyn Forget, a health economist at the University of Manitoba, has done some of the best research on the results. Some of her findings were obvious: Poverty disappeared. But others were more surprising: High-school completion rates went up; hospitalization rates went down. %u201CIf you have a social program like this, community values themselves start to change,%u201D Forget said.

A basic income might be enough to live on, but not enough to live very well on. Such a program would be designed to end poverty without creating a nation of layabouts. The Mincome experiment offers some backup for that argument, too.%u201CFor a lot of economists, the issue was that you would disincentivize work,%u201D said Wayne Simpson, a Canadian economist who has studied Mincome. %u201CThe evidence showed that it was not nearly as bad as some of the literature had suggested.%u201D

But analysis of pilot programs in which basic income was provided to communities in the U.S. and Canada suggest that it plays out differently than opponents suggest. In those programs, the overall reduction in working hours among those given basic income was extremely low. And the only participants who stopped working fit neatly into one of two distinct demographics: new mothers, and teenagers who had previously been working while attending high school%u2014neither of which are representative of the broader population

In "Just Give Money to the Poor: The Development Revolution from the South," Joseph Hanlon, Armando Barrientos and David Hulme look at the experience of recent cash transfer programs, in countries ranging from Mexico and Brazil to South Africa, Namibia, India, and Mongolia. The verdict: cash transfers work if they are both fair and assured. If poor people have even small amounts of regular ensured income, they are in general well-equipped to decide how to use it most productively. And the results not only alleviate immediate hardship, but also contribute to longer-term economic development and poverty reduction.

Dewala%u2019s team studied the effects of a minimum monthly income on 4,000 people in eight villages over 18 months. There were no conditions regarding wages, employment, caste, gender or age, and the recipients could use the money as they saw fit. Besides social security benefits, adults received 200 rupees ($3.65) a month, and mothers were given 100 rupees for each child. Four of the villages had had help from Sewa for some years, with the organisation of support groups, savings cooperatives (2), bank loans, training in financial management and support during visits to local officials. Twelve non-participant villages served as controls for comparative study. The initiative, modelled on an urban Sewa project in a district of Delhi, was India%u2019s first applied research on unconditional income. The hypothesis was that direct financial payments would change behaviour and improve family living conditions, especially children%u2019s nutrition and health.

Studies at the beginning, mid-point and end of the project confirmed that, in villages receiving payments, people spent more on eggs, meat and fish, and on healthcare. Children%u2019s school marks improved in 68% of families, and the time they spent at school nearly tripled. Saving also tripled, and twice as many people were able to start a new business.