On the proposal of Guaranteed Annual Income

It’s another year of discussions of poverty in SWRK 626 and so that means it’s time to (again) discuss the merits and drawbacks of the Gauranteed Annual Income or sometimes called Basic Income Guarantee. This year the topic came up when we started discussing possible anti-poverty interventions. Student K. Heyde mentioned the following article in the Globe and Mail. It reminded me of last year’s class when we debated the subject in-depth. I am realizing more and more that when a topic keeps appearing it’s time to write blog post.
This summer at the IRP  I asked the question to Tim Smeeding. We went back and forth and he sent me a few resources (see below) and put me in touch with a graduate student working on a similar topic.
The most relevant to the Canadian context is a report Possibilities and Prospects: The Debate over a Gauranteed Income from the Canadian Center for Policy Alternatives (h/t David Calnitsky). The report succinctly describes the three main concerns with the GAI: (1) work disincentives, (2) reciprocity, (3) and cost.

The idea of unconditional cash transfers has garnered considerable attention lately.
Anne Blumenthal picked up on the NPR story that I previously posted about here. On Anne’s post, she links to the study “Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality”. Development economist Chris Blattman has also been writing on the subject of giving cash to the poor.

In a previous post on this blog, I raised the two concerns about cost and political feasibility. I still have those concerns. In class, I argued that the GAI represents a radical shift in the conceptualization of the welfare state. Not to mention, the idea would put a lot of social workers out of job. I suspect McKnight would favor such a proposal because it would eliminate the iatrogenic social welfare system. Lots to digest here and touching on many of the key elements of social intervention (conditionality, costs, efficiency, implementation, tradeoffs, etc). Surely more to follow on this subject.

02 December update:

CBC the current ran a story (Switzerland considers a mandatory basic minimum income for everyone) this morning on their Project Money project. The story features the 1970s Canada min-come study from Manitoba.

Highly recommended

Nicholas-James Clavet, Jean-Yves Duclos, Guy Lacroix (2013) Fighting Poverty: Assessing the Effect of a Guaranteed
Minimum Income Proposal in Québec.

Steensland, B. (2008). The failed welfare revolution: America’s struggle over guaranteed income policy. Princeton University Press.

Anqi Zhang piece in the McGill Daily (2014). Enough money to survive

Other resources
Hanushek, E. A. 1987. “Non-Labor-Supply Responses to the Income Maintenance Experiments.” In Lessons
from the Income Maintenance Experiments, ed. A. Munnell. Boston:Federal Reserve Bank of Boston.

Burtless, G. 1987. “The Work Response to a Guaranteed Income: A Survey of Experimental Evidence.” In
Lessons from the Income Maintenance Experiments, ed. A. Munnell. Boston: Federal Reserve Bank of Boston

Ben-Shalom, Y., Moffit, R., & Scholz, J.K. (forthcoming). As assessment of the effectiveness of anti-poverty
programs in the United States. In Oxford Handbook of Economics of Poverty, P. Jefferson, ed. New York:
Oxford University Press. Currently available as NBER working paper No. w17042, available at: http://www.nber.org/papers/w17042.

Moffitt, R. A. (2003). The Negative Income Tax and the Evolution of U.S. Welfare Policy. The Journal of
Economic Perspectives, 17 (3), 119-140.

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