The Wall Street Journal | A guaranteed income won’t stop people from wanting to work
Economists worry that a ‘universal basic income’ would make recipients lazier. Data from programs around the world suggests the opposite is true.
By Abhijit V. Banerjee and Esther Duflo
This was originally published in The Wall Street Journal. Below is an excerpt from the article.
The idea behind a UBI is to give everyone a guaranteed income that is enough to live on.
One critical question is whether an inflow of unearned cash would cause people to become lazy and stop working altogether. Standard economic models predict a negative “income effect on labor supply,” and policymakers across the world very publicly worry about it.
Behavioral economists have also flagged the concern that if people receive a guaranteed income, they will choose to spend it on leisure even when it is not in their long-term interest. By working today, they would accumulate useful experience and skills they could parlay into better jobs in the future. But it may be too tempting to take the time off now and forgo the opportunity for self-improvement.
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In “graduation programs” pioneered by BRAC, a development NGO in Bangladesh, the poorest of the poor are given a productive asset—a cow, a sewing machine or even honeybees—and some initial economic, technical and emotional support, to help them “graduate” from poverty. In general, the beneficiaries of such programs around the world work the same amount, or more, than nonbeneficiaries.