The study “leverag[ed] an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years.” What were the results?
First, it made the recipients poorer: “Overall, the transfers led to a reduction in annual total individual income of about $1,500 in our main survey measure, compared to the control group.” Why? Well, people worked less (1.3 hours per week less) and stayed unemployed for longer! Not only do the recipients work less; this happened to other adult members of the household as well.
Unemployment duration “increased by 1.1 months” for recipients.
But did people use this time to find a better job? It doesn’t seem like it. Recipients appear to be more selective in their applications, but the authors say, based on their survey measurements, “We do not see much in the way of differences in the types of jobs participants applied for,” and “the results do not support any changes in quality of employment.”
Were people doing other productive things in unemployment, though? The results are unimpressive.
The authors examine whether the receipt of basic income increases entrepreneurship. While they find people claiming to have more entrepreneurial intention, this does not translate into actual entrepreneurial activity.
What about education? Do people go back to school? Mostly no. The authors say, “By and large, we do not observe significantly improved education outcomes in our sample, though there are some indicators of minor improvements.”
So what did people do with the extra time they got from working less?
In short, the answer is, they relaxed.
How does this contrast with existing studies in the topic? I haven't really read up on that...
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I know of at least one other study showing that (surprise) free money disincentivizes work:
One critique of both studies could be that the populations that were studied already have marginal attachment to the workforce and are unlikely to find jobs they consider meaningful.
I'd imagine that giving income to single mothers who are motivated to better their lives, or a young college grad thinking about starting a business, might have different effects, for example.
I don't know of the specific citations, but the prevailing wisdom among center-left liberals is that giving people money helps them afford things like gas, childcare, and education which allows them to better their lives.
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Nature has always provided UBI, be it mangoes in easier areas on the globe or whatever you can hunt in the snow up North...
Or a sewer rat in big cities, those are up for grabs for the hungry!
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Is that really UBI? Seems to me it requires work. Picking and hunting.
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Its universal, because nature is hunt or be hunted Its basic, well because a sewer rat is very basic food And its honestly earned income, through picking and hunting yes!
All you need is to remove the state & build a huuuuge wall around all large cities in the West ;-)
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lol. So nothing like UBI.
UBI is more like a caged animal in a zoo.
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Well, that is what I'm trying to do, rebrand it as something sane & sustainable! ;-)
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you call that a big study? just you wait my State of Oregon might pass the largest ubi experiment to date in 2 weeks 🫠
if passed, beyond ngmi
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Lol and that kids is how you get inflation double whammy, more money driving down the need to work, the need to work drives down the production of goods and services and the doom loop continues
But yeah lets do more tests, MOAR!!! Our little Potemkin village isn't a good enough sample, make it bigger, throw more money at it lol
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This behavior is not surprising when viewed through the lens of Austrian theory. The disutility of labor has been a known phenomena in Austrian economists for decades.
When individuals receive financial support without the need for work, they choose to minimize their labor participation. Recipients of UBI worked less and experienced longer unemployment durations. When basic needs are met through cash transfers, the disutility of labor outweighs its benefits. This is a key tenet of Austrian economics: if the costs of working—whether in time, effort, or stress—exceed the perceived rewards, individuals will opt for leisure.
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I don’t even think you need Austrian economics for this, just regular economics would predict the same thing
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10 sats \ 2 replies \ @Cje95 24 Oct
If we keep trying it’ll work
  • Some Idiot Somewhere
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“You didn’t try the real UBI. This time it will be different.”
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Ahhh yes much better!
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10 sats \ 3 replies \ @OT 24 Oct
I wonder how sub cultures would deal with UBI. Like would savers just put it in the bank? Gamblers gamble it away? I'm sure we all know what bitcoiners would do.
I'm actually pro UBI. Its the fastest way to hyperbitcoinization!
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'Its the fastest way to hyperbitcoinisation'
You mean it will collapse the fiat system faster via the printing of all that fiat to fund the UBI? Not sure about that as many UBI promoters want to cancel all targeted welfare once their UBI is in place. In many cases people in the most need (as assessed under current welfare programs) would get less assistance under a UBI system...
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10 sats \ 1 reply \ @OT 24 Oct
You mean it will collapse the fiat system faster via the printing of all that fiat to fund the UBI?
Yes
The effects on current welfare is probably beyond my pay grade. However, countries that have no welfare usually depend on their family more. That might not be such a bad thing.
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I agree. Living in New Zealand we had one of the first state funded welfare systems in the world- it was specifically designed to support men who had come here in the 1860s-80s gold rush and were now old, and had no family. There is a limited place for state funded welfare, IMO, but it easily gets out of control. It can too easily be a cause of family breakdown and unhealthy dependency.
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three people independently sent me this article. Lol, guess I'm jaaacked in
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