A separate study suggests that lump-sum payments may be more effective in building long-term wealth, but have less impact on mental health.
A study in Kenya found that both lump sum and monthly payments had positive effects on low-income households.
The Welsh government is ending its Universal Basic Income (UBI) project in 2025 due to cost concerns.
The Welsh government has decided to conclude its Universal Basic Income (UBI) project after the initial pilot ends in 2025, citing cost concerns. The pilot involved providing monthly payments to a group of care leavers, and initial feedback has been positive. However, despite the success of UBI pilots worldwide, no country has implemented it due to cost concerns and public opinion.
In a related development, a study conducted by GiveDirectly in rural Kenya compared the impact of different cash transfer methods on low-income households. The study found that both lump sum and monthly payments had positive effects on recipients. The lump sum group experienced greater financial benefits, such as higher earnings and increased business startups, while the monthly payment group saw positive results through rotating savings and credit associations.
A separate study on UBI suggests that lump-sum payments may be more effective in helping those in need build long-term wealth compared to monthly cash payments. However, monthly payments still provide immediate assistance to those in need. The study was conducted by Nobel prize economist Abhijit Banerjee and other researchers. The study also noted that lump-sum payments had the smallest positive impact on mental health.
These findings suggest that while UBI can have positive impacts, the method of distribution and the specific needs of the recipients can significantly influence the outcomes. As such, further research and experimentation may be necessary to determine the most effective ways to implement UBI.
