The psychological stability afforded by a guaranteed regular paycheck also emboldened some of the Finnish recipients to be more entrepreneurial. Sini Marttinen, one of the recipients, likened her experience on basic income to winning the lottery. “It gave me the security to start my own business,” she said. This entrepreneurial effect has also been observed in the past with cash transfers in places like Kenya.Vox: Finland Gave People Free Money. It Didn’t Help Them Get Jobs — but Does That Matter?
Charities almost never have good evidence that what they want to spend money on is better than what poor people would choose to spend the money on if they just got the cash themselves. I certainly don’t trust myself to know what the world’s poorest people need most.
I’ve been profoundly lucky to never experience the kind of extreme poverty that billions of people worldwide have to endure. I have no idea what I would spend a cash transfer from GiveDirectly on if I were in Jacklin’s shoes. Would I spend it on school fees? Maybe! Or maybe I’d use it to supplement my food budget. Or save for a new house. I really don’t know.
You know who does have a good sense of the needs of poor people like Jacklin? Poor people like Jacklin. They have a very good idea of what they need. And you should only give something other than cash if you are confident you know the recipients’ needs better than they do.
“A universal basic income would provide a much more secure income base in an age of deepening economic and social insecurity and unpredictable work patterns,” economists Howard Reed and Stewart Lansley said in a report on basic income published in May last year.
“It would offer much greater financial independence and freedom of choice for individuals between work and leisure, education and caring while recognizing the huge value of unpaid and voluntary work.”