Targeted Transfers May Be More Effective Than Universal Basic Income

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Targeted Transfers May Be More Effective Than Universal Basic Income

New Delhi: Over the past few years, the idea of a Universal Basic Income for all citizens has been gaining currency, in the developed as well as the developing world. But while Universal Basic Income may seem a more attractive alternative to targeted transfers on paper, it may not always be so in reality, a new research paper by Rema Hanna of the Kennedy School of Government at Harvard University and Benjamin Olken of the Massachusetts Institute of Technology (MIT) suggests. Hanna and Olken use data from Peru and Indonesia to show that targeted schemes can meet welfare goals such as poverty reduction much more effectively compared with Universal Basic Income for a given programme cost.

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