A Quasi-Experiment for Universal Basic Income: Evidence from Remittances in Colombia

54 Pages Posted: 6 Aug 2019

See all articles by Erika Schutt

Erika Schutt

University of Miami - School of Business Administration - Department of Economics

Date Written: August 1, 2019

Abstract

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

Schutt, Erika, A Quasi-Experiment for Universal Basic Income: Evidence from Remittances in Colombia (August 1, 2019). University of Miami Business School Research Paper No. 3430801. Available at SSRN: https://ssrn.com/abstract=3430801 or http://dx.doi.org/10.2139/ssrn.3430801

Erika Schutt (Contact Author)

University of Miami - School of Business Administration - Department of Economics ( email )

P.O. Box 248126
Coral Gables, FL 33124-6550
United States

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