Future Tense

Nobel-Prize laureate Abhijit Banerjee on the world's largest UBI experiment

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Apr 11, 2024
Nobel-Prize winning economist Abhijit Banerjee discusses the world's largest UBI trial in Kenya. They touch on topics such as the impact of different UBI payment methods, digital device addiction, and the shift from traditional values to new virtues in society.
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INSIGHT

Duration Shapes Behavior

  • The trial in Kenya covers 295 villages and over 20,000 families in a 12-year randomized control design.
  • Duration shapes behavior: long-term guarantees change how recipients plan and invest versus short-term payments.
ANECDOTE

Lump Sum Spurs Business Starts

  • The lump-sum group received one upfront payment roughly equal to two years of monthly grants and reacted differently.
  • They started the most businesses, likely because they needed to make the money last or grow it quickly.
INSIGHT

Expectations Drive Investment

  • Identical cash flows produced different choices when expectations differed about future payments.
  • Long-term recipients started new businesses while short-term recipients consolidated existing assets.
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