Abstract
Artificial intelligence is rapidly entering our daily lives in the form of driverless cars, automated online assistants and virtual reality experiences. In so doing, AI has already substituted human employment in areas that were previously thought to be uncomputerizable. Based on current trends, the technological displacement of labor is predicted to be significant in the future – if left unchecked this will lead to catastrophic societal unemployment levels. This paper presents a means to mitigate future technological unemployment through the introduction of a Basic Income scheme, accompanied by reforms in school curricula and retraining programs. Our proposal argues that such a scheme can be funded by a special tax on those industries that make use of robotic labour; it includes a practical roadmap that would see a government take this proposal from the conceptual phase and implement it nationwide in the span of one decade.
References
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Appendix
Table 4 shows unconditional transfer scheme experiments worldwide.
Worldwide unconditional transfer scheme experiments.
| NAMIBIA | |
|---|---|
| Period | January 2008 – January 2010 |
| Name of the Project | The Basic Income Grant Experiment |
| Project Manager | A coalition of: 1) Council of Churches (CCN) 2) National Union of Namibian Workers (NUNW) 3) Namibian NGO Forum (Nangof) 4) National Youth Council (NYC) 5) Namibian Network of AIDS Service Organizations (Nananso) |
| Location inside Country | Otjivero-Omitara Village |
| Population Sample | 930 inhabitants |
| Cash Transfer | 100 Namibian Dollars (roughly 12.40 US dollars at the time) |
| Findings | 1) The percentage of households living under the food poverty line fell from 76 % to 37 %. 2) Great reduction of child malnutrition. 3) School attendance dropped by 42 %, while drop-out rates dropped from 40 % to 5 %. 4) A sizable portion of participants used the income to start or improve their own small businesses, such as brick-making and baking bread. 5) Overall increase in economic activity and savings accompanied by an overall decrease in household debt. |
| Main Limitations | 1) One or more of the participating project managers may be characterized by potential bias or hidden agendas. 2) Small sample size and the selection of only one village for the experiment. 3) Findings may not be indicative for developed countries as well. |
| KENYA | |
| Period | April 2011 – January 2013 |
| Name of the Project | GD Project |
| Project Manager | GiveDirectly Inc. NGO |
| Location inside Country | 120 villages in the Rarieda District |
| Population Sample | 1372 households |
| Cash Transfer | 1) Three quarters of the sample received KES 25,200 (USD 300 at the time). 2) One quarter of the sample received KES 95,200 (USD 1,000 at the time). 3) Half of the sample received the transfer in equal monthly instalments across nine months, whereas the other half received the transfer as a one-time lump sum payment. |
| Findings | 1) On the economic side, these transfers led to an increase in overall consumption, reduction of hunger, increase in investments on livestock and small business, and allowed poor households to build assets. 2) At the psychological level, these transfers led to a 0.18 standard deviation increase in happiness and a 0.15 standard deviation increase in life satisfaction, all these measured by customized questionnaires. 3) In addition, stress levels among the individuals in the sample fell sharply as evidenced by a reduction in the levels of the stress hormone, cortisol. |
| Main Limitations | 1) Results are still preliminary as the study is in progress. 2) Findings may not be indicative for developed countries as well. |
| INDIA | |
| Period | 2010–2013 |
| Name of the Project | 3 different projects |
| Project Manager | Self-Employed Women´s Association (SEWA) with financing from United Nations Development Program and UNICEF. |
| Location inside Country | Delhi and Madhya Pradesh |
| Population Sample | 15,000 individuals in 20 villages |
| Cash Transfer | 1) First year: 200 Rupees (about USD 3.75 at the time) to every adult man and woman. Children under the age of 14 were granted 100 Rupees. 2) Second and third year: 300 Rupees for adults and 150 Rupees for children |
| Findings | 1) Reduction in hunger and malnutrition. 2) Increase in the household budget dedicated to healthcare. 3) School attendance and drop-out rates improved by a factor of three. 4) Increase in overall economic activity. 5) Improvement in societal relations. |
| Main Limitations | 1) Monthly monetary amounts offered to the citizens may be too small to affect individual incentives. 2) The differences in findings between the first year (lower amounts of UUBI) and the other two years are not clear. 3) Findings may not be indicative for developed countries as well. |
| FINLAND | |
| Period | January 2017 – January 2019 |
| Name of the Project | Basic Income Experiment |
| Project Manager | Finnish Social Security Government Agency (KELA) |
| Location inside Country | Nationwide |
| Population Sample | 2000 unemployed citizens between the ages of 25 and 58. |
| Cash Transfer | EUR 560 |
| Findings | 1) Significant cut in governmental red tape and bureaucracy. 2) Alleviation of poverty. |
| Main Limitations | 1) Results are still preliminary as the study is in progress. 2) Small sample size. 3) The experiment does not cover the effect that UUBI would have on those citizens that are employed. |
Sources: For the Namibian experiment and its lessons see Haarman and Haarman (2012). Results on the Kenyan experiment are detailed in Haushofer and Shapiro (2016). The results of the Indian pilot projects are presented in Fernandez (2013). Finally, details on the basic income experiment in Finland can be accessed from Kela`s official website.
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