The Self-Employed Women’s Association (SEWA) recently completed a large pilot project on Basic Income in India. The association’s June Newsletter reports on the methodology and findings of the study.
The project randomly assigned 8 out of 20 villages in the study to receive the grant, while the other 12 villages were used as controls. Every adult man and woman in the treatment villages received a grant of 200 Rupees (about US$3 or N$30) per month and every child received 100 Rupees per month. After one year, the amounts were increased to 300 Rupees and 150 Rupees respectively. A total of 6,000 individuals in the 8 villages received the grants for 12 to 17 months. The amount was equivalent to about 20 to 30 percent of household income for the lower-income families in the study.
Researchers conducting the study found that the grants significantly reduced hunger, malnutrition, and illness among recipients. Recipients increased ownership of livestock, reduced, improved school attendance, improved school attendance, and increased investment in agricultural implements. Researchers found no increase in alcohol consumption in the treatment villages. Importantly, the study also found that grant recipients worked more than people in the control villages and that they were three times more likely to start a new business. These results for a positive effect on work effort and earned income (found both the Uganda and the India studies) are confirmed by evidence from cash transfer programs. For example, in South Africa, the Old Age Pension, the Child Support Grant, and the Disability Grant all helped to raise labor force participation and employment.
SEWA, “Unconditional cash transfers: SEWA pilots a unique experiment in Madhya Pradesh,” We the Self-Employed: SEWA’s Electronic Newsletter, No. 50, June 2013.