Universal basic income tackles poverty directly by giving everyone in society enough money to live on. It's an old idea, with support ranging from MLK to Milton Friedman, but it has the potential today to end poverty around the world.

1. How does it work?

   Basic income is a specific type of cash transfer. In its fullest form, it's

   • unconditional (recipients don't have to work or do anything else to be eligible),
   • universal, with all members of society receiving,
   • enough to cover basic needs, and
   • guaranteed for the recipients' lifetimes.

   Supporters may disagree about details like how much money is required for basic needs. And some people prefer variants to the full universal basic income like a negative income tax, which reduces payment amounts as recipients earn more income.

   The core idea, though, is that we should use cash transfers to guarantee a minimum standard of living in society.

2. What's the history?

   Basic income has a long history, claiming supporters from across the political spectrum and with interest in the idea dating back to Thomas More.

   More recently, Dr. Martin Luther King Jr. argued we should replace "indirect", "piecemeal and pygmy" anti-poverty policies with a guaranteed income floor.

   Economists Milton Friedman and Friedrich Hayek supported using a negative income tax to simplify welfare policy and protect individual freedom.

   In the 1970s, the US and Canada conducted negative income tax pilots in 5 areas, and the US nearly passed a law implementing a basic income variant. But the pilots were inconclusive and the political moment passed.

   As a result, basic income has never actually been fully implemented, and there's still a lot we don't know about how its effects.

3. Why do we need this?

   Basic income has enormous potential.

   • Developed and developing world governments maintain complex systems of overlapping programs for the poor. These programs are costly and often fail to actually reach the intended recipients.
   • 700 million people around the world live in extreme poverty. It would take $80 billion in cash transfers to move everyone above this poverty line, while the world spends almost twice that in global aid every year.

   Basic income tackles poverty directly: payments are sized to meet basic needs, and no one who receives them has to struggle to live on less.

   Because a basic income has never been implemented or even sufficiently tested, there's a lot we still don't know. But if it works, basic income could change social protection and aid policies that affect poor people all over the world.

While the idea of a basic income has been gaining momentum recently, it remains controversial and has not yet been put to a sufficiently large-scale, long-term experimental test.

1. Support for a basic income is gaining momentum

   New basic income pilots have been announced in Canada, Finland, the Netherlands, and the US. Elsewhere, the policy has captured the interest of policymakers and voters in places as varied as India, Switzerland, France, New Zealand, Namibia, Scotland, and Germany.

   Once again, this interest stems from a diverse set of perspectives.

   • Supporters in Silicon Valley (and President Obama) wonder whether basic income is the answer to job disruption caused by coming advances in automation.
   • Others are interested in basic income as, "the world's simplest plan to end poverty."
   • Feminists have supported basic income as a way to recognize unpaid labor and introduce more parity in relationships.
   • And some libertarians continue to advocate for the policy as a way to simplify bloated, paternalistic welfare systems.

2. But it remains controversial

   Many people argue that a basic income is just too expensive.

   Others claim recipients of basic income will stop working or misspend the money on things like alcohol, with the likelihood that "large segments of society could drift into an alienated idleness."

   Without better evidence, it's difficult to tell who's right.

3. There have been tests, but there's a lot we still don't know

   The deep evidence base for other unconditional cash transfers provides plenty of reasons to be intrigued by basic income. We know people who receive cash transfers don't blow it on drinks or stop working but rather increase their earnings, their assets, and their psychological well-being.

   But basic income is a specific type of cash transfer that hasn't been sufficiently tested.

   A number of studies provide hints about how a basic income might work, but they either were not universal, did not test payments big enough to cover basic needs, were too short term, or weren't evaluated with a randomized control trial.

For more detail, see our literature review notes.

GiveDirectly is working with leading economists to organize an ambitious experiment that will rigorously test the impact of different models of basic income over 12 years in Kenya.

1. Here's how the experiment will work

   Working in rural Kenya, we'll conduct a randomized control trial comparing 4 groups of villages:

   • Long-term basic income: 40 villages with recipients receiving roughly $0.75 (nominal) per adult per day, delivered monthly for 12 years
   • Short-term basic income: 80 villages with recipients receiving the same monthly amount, but only for 2 years
   • Lump sum: 70 villages with recipients receiving the same amount (in net present value) as the short-term basic income group, but all up front as a 'lump sum'
   • Control group: 100 villages not receiving cash transfers

   More than 21,000 people will receive some type of cash transfer, with more than 5,000 receiving a long-term basic income.

   We will use an independent contractor for all research surveying, publicly register the study to mitigate publication bias, and publish a pre-analysis plan that will guide how analysis is conducted to prevent cherry-picking.

   While payments for the long-term group will continue for 12 years, we'll have results on how long-term cash transfers influence short-term decisions and welfare within the first 1-2 years.

2. Here's what we'll learn

   Comparing the first and second groups of villages will shed light on how important the guarantee of future transfers is for outcomes today (e.g. taking a risk like starting a business). The comparison between the second and third groups will let us understand how breaking up a given amount of money affects its impact.

   We will assess the impact of a basic income against a broad set of metrics, including:

   • economic status (income, assets, standard of living)
   • time use (work, education, leisure, community involvement)
   • risk-taking (migrating, starting businesses)
   • gender relations (especially female empowerment)
   • aspirations and outlook on life

3. We're working with a team of leading scholars

   We've built a strong research team, including Abhijit Banerjee, co-founder of J-PAL and a professor at MIT; Alan Krueger, a former Chairman of President Obama's Council of Economic Advisers and a professor at Princeton; and Tavneet Suri, Scientific Director for J-PAL Africa, also at MIT.

You can help launch the largest basic income research study in history (while helping tens of thousands people escape poverty).

This is an historic opportunity – at a minimum we'll help thousands of the poorest families on the planet significantly improve their lives. At best, we can help find a path to ending extreme poverty in our generation.

For just $1 per day, you could support one person's basic income and move this historic study forward. Join the community of forward thinkers supporting this project by donating now or signing up for email updates to keep informed about how the project is going.