Basic Income: A Comparative Study of Brazil and India

University essay from Lunds universitet/Nationalekonomiska institutionen

Abstract: Do we know enough about Basic Income (BI) to support or discharge it? In this paper, two studies on the subject are reviewed in order to answer this question. One is the pilot study of Unconditional Basic Income in rural India (conducted by SEWA and UNICEF in 2011-2013) and the other is the Bolsa Escola/ Bolsa Familia program that was launched in Brazil in 1995 and is still ongoing. The aim is to map out different and similar components and results of the two implementations of BI and to compare them to each other, and also to compare the results to the theoretical and empirical expectations. The questions that are answered by this paper are: 1. What were the results of the Indian and Brazilian BI studies, and were they similar to the ones that could be expected from theoretical and empirical experience? 2. Are the results convincing enough to make future policy recommendations in favor of Basic Income in other countries? To examine these two studies a six-principle framework is used, covering different aspects, which aim to determine the successfulness of a policy. Rawls Theory of Justice and classic labor economic theories are used to analyze the results. The analysis shows that the components that were present in both studies were the overall reduction on levels of poverty (school participation rates, health and equality). This despite the Indian study being universal to all within the test villages, and the Brazilian study being selective and conditional, which is not in line with what could be expected from theory. As was expected from the labor supply curve, there was a small drop in labor supply detected in both studies, even if the overall productivity was perceived better in the Indian villages with the BI. In these two cases the impact of a BI was successful, but since the two studies differ largely more research on what role local factors play is relevant in order to make recommendations in other countries for implementing BI policies.

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