A Quasi-Experiment for Universal Basic Income: Evidence from Remittances in Colombia
54 Pages Posted: 6 Aug 2019
Date Written: August 1, 2019
With the purpose of investigating the possible impacts of a Universal Basic Income (UBI) in Colombia, I use remittances as a proxy for UBI to study the heterogeneous effects of an exogenous increase in a household "unearned income" on: labor supply (extensive and intensive margin), entrepreneurship, education, and marital status (divorce). I also try to identify how these effects vary across the income distribution depending on how much the transfer represents as a proportion of labor income. Estimates suggest that (i) on average recipients of remittances do not experience an effect on the outcome variables, but (ii) when the transfer represents between 160% - 420% of the labor income, it significantly increases the likelihood of studying, entrepreneurship, and working less hours.
Keywords: Universal Basic Income, Cash Transfers, Unearned Income, Labor Supply, Education, Marital Dissolution, Policy Evaluation
JEL Classification: D14, I14, I24, I38, J12, J22
Suggested Citation: Suggested Citation