3 Comments

1. A Bayesian analysis is not strictly comparable to the null-hypothesis model of the earlier NBER studies. Roughly speaking the former asks, is it reasonable to accept/increase one’s credence In X whereas the later asks, can we reject ~X. It is possible to answer yes to the former and no to the latter without contradiction. I do not place much weight on this reason

2. The targeted populations are very different. On may assume that social indicator-improving actions are much more income constrained in a low- and medium-income country than in the US. To take an easy example, in the US there are many ways a quite poor person can access health care and the additional income from a UBI would not make it more likely they could do so. In a poorer country the additional income coud be of great importance. I do place weight on this reason

3. The new study, no more than the earlier ones, does not compare UCT/UBI to a wage subsidy like EITC and so has little bearing on my skepticism about UBI _as an income transfer instrument_ as opposed to as a social indicator improvement instrument. For the later objective, a UBI/UCT coud be effective in a low to middle income country and ineffective in the US.

https://thomaslhutcheson.substack.com/p/ubi-after-all

https://thomaslhutcheson.substack.com/p/ubi-no

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Interesting piece Arno Rohwedder on UBI. Oddly, the results in these studies are firmly opposed to those that were recently published.

I am still skeptical of UBI, the cost to provide even a low floor of material benefits is so high that I am not sure it is affordable absent heavy tax increases that risk depressing growth (and thus making us all worse off anyway). This is especially so when the benefits of UBI are tenuous.

Nonetheless, I hope one day it could work! There are alternatives, such as a Negative Income Tax or a Child Tax Credit concept that I explore at Risk & Progress that may ultimately be a better approach.

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Hi J.K.

Yep, absolutely. The costs of a UBI really do seem to make the Universal part impossible. And without the Universal part you are just back to some version of 'normal' redistributive policies such as the ones you mention. Which we would favour as well. Short of transformational economic growth (which would make the welfare case for a UBI much less compelling anyway), it's hard to see how governments outside the oil/gas rich gulf states with small populations could ever afford it.

It didn't overly surprise us that the results of a UBI pilot in Kenya were different to those in Finland, Texas, Illinois, or California given how disparate those geographies are. It probably would have been more surprising if the results were the same!

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