![]() ![]() The cases where you actually have seen it in practice are often in cases where there's some sort of natural resource in place which would fund the programs. As Ben was talking about, you also have to figure out how to pay for it. Rema Hanna : While the idea of the universal basic income is very much out there in the press, actually there are very few examples of a universal basic income in practice. Mark Zuckerberg might get the positive universal basic income, but his taxes might go up by more than that to pay for these universal basic incomes that we're giving to everybody else, so he might be less well-off, in some sense.ĪEA: Can you give some examples of universal basic income programs that currently exist? The net effects in instituting a universal basic income policy are going to depend on how much you pay in taxes. We're also going to raise taxes on the people who pay for that check. If we think about policy change, where we're putting in place a universal basic income, in some ways we can think of it as we're handing a check to everyone. ![]() Presumably if the government is giving it out, the government has to collect this money from taxes somehow. You have to think about the fact that the money for the universal basic income comes from somewhere. One of the points we make in our paper, though, is that in some sense you can't just think of the universal basic income in isolation. That's the way these things are often described or pitched. One way to think about it is that everybody gets a check from the government every month for a certain amount of money, and the fact that it was to everyone rather than a subset of people is what makes it universal.ĪEA: So a person like Mark Zuckerberg would be getting the same amount in his check as say a construction worker in Cleveland? What is a universal basic income and why are people talking about this idea now?īen Olken : A universal basic income is a transfer from the government to everybody regardless of your income. Your browser does not support the audio element.ĪEA: Lately there's been rising interest in both poor and rich nations around the idea of establishing universal basic incomes. A longer audio version can be heard using the media player. The highlights of that interview, edited for length and clarity, are below. Hanna and Olken spoke with the AEA about the challenges of determining which citizens qualify for assistance in developing countries, the trade-offs that need to be considered, and how the conversation around universal basic income is different for wealthy countries like the United States. ![]() Their paper in the Journal of Economic Perspectives lays out the trade-offs involved in opting for broad universal basic income programs versus narrow targeted ones that offer larger payments to fewer people. This has raised questions about whether programs should even bother with targeted aid, and just cut paychecks to everybody to ensure the neediest citizens get some kind of help.īut the simple solution may not be the best one, according to Rema Hanna and Benjamin Olken. A majority of people work in the informal economy and don’t file tax records, leaving the government to make an educated guess about how much people earn. Identifying low-income people in developing nations is incredibly difficult. īut it’s tough to know where to distribute that aid. Programs that provide assistance to the poor will be critical in helping reach the UN’s goal to eliminate extreme poverty worldwide. The authors of a recent JEP paper looked at anti-poverty programs in Indonesia to compare the effectiveness of targeted assistance programs with universal basic incomes. ![]()
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