A Basic Income Grant (BIG) is a form of social security in which all citizens or residents of a country regularly receive an unconditional sum of money from the government, regardless of their income, resources or employment status. The main goals of a BIG are to provide a basic standard of living for all citizens and to alleviate poverty and income inequality[1][2].
Pros of a Basic Income Grant
Alleviating poverty and income inequality
A BIG would provide a steady income to all citizens, which would significantly reduce poverty and income inequality. The regular payments would help ensure that everyone can meet their basic needs[1][2].
Improving health and wellbeing
By reducing poverty and providing financial security, a BIG would have positive impacts on physical and mental health. It would reduce stress and allow people to better afford healthcare, food, housing and other necessities[2][4].
Reducing administrative costs
Compared to traditional welfare programs, a BIG would be simpler and cheaper to administer since there would be no means-testing or eligibility requirements to verify[2][3].
Providing a safety net for the vulnerable
A BIG would provide a reliable source of income for those in vulnerable situations, such as victims of domestic violence, people with disabilities, and those unable to work[4].
Encouraging entrepreneurship
By providing a basic income, a BIG would give people more freedom to take risks, start businesses, pursue education, or engage in unpaid care work without fear of falling into poverty[4][5].
Cons of a Basic Income Grant
High cost
Providing a meaningful basic income to an entire population would be extremely expensive for governments. The costs could potentially be prohibitive, especially for developing countries[1][2].
Potential disincentive to work
Some argue that a BIG could reduce the motivation to work, although studies have shown only modest reductions in employment, if any[2][4].
Fairness concerns
Providing the same payment to everyone regardless of need raises questions of fairness. Some argue the money could be better targeted to those most in need[3][4].
Inflation risk
If a BIG is not implemented carefully, it could potentially lead to inflation as people have more money to spend[4].
Sustainability
Ensuring a BIG program remains fiscally sustainable over the long-term would be challenging, especially if it is not funded through reliable revenue sources[3].
Conclusion of what is BIG
In conclusion, a Basic Income Grant is a bold policy proposal with the potential to significantly reduce poverty and improve wellbeing, but it also faces major challenges around cost, implementation, and potential unintended consequences. More evidence from ongoing pilots will help shed light on its feasibility and impacts.
Measuring the Impact of Namibia's Basic Income Grant (BIG) Pilot
Namibia conducted a two-year pilot of a Basic Income Grant (BIG) from 2007-2009 in the Otjivero-Omitara region. The pilot provided a monthly unconditional cash transfer of NAD100 (about $13) to all residents under 60 years old. Researchers conducted a thorough evaluation of the pilot's impacts using several methods:
Baseline and Panel Surveys
- A baseline survey was conducted in November 2007 before the BIG started.
- Panel surveys were conducted in July and November 2008 to track changes over time.
Key Informant Interviews
- Researchers gathered information from key informants in the Otjivero-Omitara area.
Case Studies
- Detailed case studies were done on individuals living in Otjivero-Omitara.
The evaluation found very positive results from the BIG pilot:
- Household poverty rates fell from 76% before the BIG to 37% after one year. For households not affected by in-migration, the poverty rate dropped to just 16%[3].
- Child malnutrition rates declined from 42% in November 2007 to 17% in June 2008 and 10% in November 2008[3].
- School attendance increased by 90% as more parents could afford to send their children to school. Dropout rates fell from 40% in 2007 to 5% in 2009[3].
- Crime rates fell by 42% overall, with stock theft down 43% and other theft down nearly 20%[3].
The thorough evaluation approach, combining baseline data, panel surveys, key informant interviews, and case studies, provided robust evidence of the BIG's significant positive impacts in reducing poverty, malnutrition, school dropouts, and crime in the pilot region. However, the pilot did not lead to a nationwide rollout of the BIG in Namibia.
Citations:
[1] https://www.investopedia.com/terms/b/basic-income.asp
[2] https://www.employment-studies.co.uk/news/universal-basic-income-pros-cons-and-evidence
[3] https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/56/56018376-a730-4fc6-920d-0d3c3116cce6.pdf
[4] https://www.procon.org/headlines/universal-basic-income-top-3-pros-and-cons/
[5] https://www.penguin.co.uk/articles/2021/02/universal-basic-income-pros-cons
[6] https://irr.org.za/media/basic-income-grant-weighing-up-the-pros-and-cons-biznews
[7] https://college.unc.edu/2021/03/universal-basic-income/
[8] http://base.socioeco.org/docs/big_resource_book.pdf
