Tuesday, July 23, 2024

Universal Basic Income

Well, this is sort of depressing but similar to what we have seen before.

Megan McArdle on X

I'm a UBI skeptic and this is worse than I'd have predicted: $1,000 a month reduces work and increases leisure. Minimal effect on schooling, job quality or other human capital investment. Hard to imagine selling UBI on data like this.  (Announcement here) (Study here)

Sarah Miller on X

The cash generated big improvements in stress and mental health, but they were short-lived. By the second year of the transfer, treatment and control reported similar rates of stress and mental health, and we can rule out even small improvements. (with graph)
Sarah Miller on X again

Mirroring what we see for mental health, the transfer generated large but short-lived reductions in food hardship/food insecurity; even by year 2, no significant difference across treatment arms. (graph)

We saw something similar in educational interventions like Head Start or whatever this year's new educational fad is. Scott Alexander has looked at educational interventions and concludes that gains are temporary and large findings are a result of selection bias (referencing Fredrik deBoer).

We saw something similar in criminal justice interventions. Good initial results that level off and become indistinguishable from controls fairly quickly.

You might tuck this thought into the back of your brain whenever you see the evaluation that some intervention "didn't scale up." It may not be the scaling, it may be that the effect wears off.  I knew a psychiatrist who claimed that Prozac usually wore off in a few years and you had to switch to something else. (Referring to depression, not OCD) We adjust to the new normal and our core personality reasserts itself.

"Tiny Ash Cannon" a text thread of mine that includes some you know, suggests that this is similar to the happiness studies about making more money. We just adjust our explanations to another level.


5 comments:

  1. I have read that one's basic level of happiness remains steady, and one returns to it regardless of good or very bad fortune. Those who experience life-altering injuries also end up just about as happy as before after a while, so the studies suggest.

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  2. This is known as the Hawthorne Effect.

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  3. The only rationale for UBI is the one originally proposed by Milton Friedman IIRC ... Being universal it eliminates the Welfare Industrial Complex required to administer targeted benefits, the 'fall off a cliff' elimination of benefits at a given income level, and is more fungible than restricted purpose benefits. Essentially all of these studies are asking the wrong questions.

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  4. Many years ago, I tried to justify a UBI and could not. The sticky part for me is that I like the idea of basic health treatment for everyone, but there is no beginning or end to that, so it too ends up unworkable.

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