MIT Sloan Researcher Studies New Ways Out of Poverty with Universal Basic Income

CAMBRIDGE, Mass., July 10, 2018–In the largest and longest trial of its type, an MIT researcher will study the effects of a guaranteed monthly income payment to some 21,000 Kenyan villagers who will receive payments from 2-12 years.

The payments are part of a universal based income scheme or UBI. The study was reported recently in Nature

UBI’s are increasingly receiving attention as a potential answer to poverty in light of dramatic economic and technological changes that are fostering new record high rates of economic inequality here and abroad.

The Kenyan experiment will shed new light on the ability of UBIs to eradicate poverty and improve the living standards of the world’s poor.

“It’s a poverty-alleviation tool,” says Tavneet Suri, an economist at the Abdul Latif Jameel Poverty Action Lab at the Massachusetts Institute of Technology in Cambridge and one of the lead investigators on the Kenya trial.

“Participants can invest because their guaranteed income payments help them to take care of their basic needs. For example, in some studies, participants have reported better health care routines—including increased vaccination to prevent disease and increased investment in pre-natal health. Other studies have shown an increase in schooling rates.

In the Kenyan experiment, Suri and colleagues created four different segments to study the effects of different amounts of payments for different lengths of times. “We can run a horse race between different types of UBI,” says Suri.

For example, in one set of experiments every adult in 80 Kenyan villages will receive 2,250 Kenyan shillings every month for 2 years. A second set of payments provides the same amount of money each month for 12 years. A third set of payments provides a total equivalent to US $505 — 2 years’ of basic income — in 2 payments, separated by 2 months. The fourth arm serves as a control group that gets nothing.

Participants in a pilot project that began in 2016 are enthusiastic about their prospects. As one participant told Nature magazine: “This has made me believe that I can commit and be able to pay school fees for my children and I am also confident of saving money to improve my business.”