Unconditional cash transfer or universal basic income?

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With recent events involving the Department of Social Welfare and Development (DSWD) and alleged irregularities regarding the Pantawid Pamilyang Pilipino (4P) scheme, many people have expressed concern about the effectiveness of existing or current conditional cash grants and other public programs aimed at eradicating extreme poverty in the country. Which model suits Filipinos, given our culture and sensibilities? How can we maximize our limited budgets to lift our less fortunate fellow citizens out of poverty?

While some may argue that donations or handouts can lead to irresponsible behavior and dependency, it is also true that many poor families are unable to make the most of opportunities because they simply do not have ways to capture them. For example, too many Filipinos are unable to get good jobs, not because they are lazy, but because they haven’t had a chance to get a degree, which is usually a requirement demanded by employers.

Although unpopular, one possible route to success in this aspect is Universal Basic Income (UBI). Criticism against UBI includes arguments about funding difficulties and the tendency of people to work less, which results in less tax revenue for the nation. While it’s impossible to know for sure how it will perform in the Philippines – without first trying it out as an experiment – it would be wise to consider real evidence from places that have studied and tried it.

A UBI experience was held in Stockton, California in 2019. As the nation’s first UBI experience, the program was scheduled to last two years. After the program period, it was considered a success, with the following results: full-time employment levels among the UBI group increased faster than in the control group, and mental health and well-being participants have been significantly improved. One of the participants in Stockton said the money helped him get a stable full-time job because he was able to do an unpaid internship. Another participant said he was able to obtain his real estate license because he could afford to reduce his working hours.

Studies have shown that financial security translates into reduced stress and anxiety. Many participants in the Stockton study said they were able to pay off their debts or move to a more stable and healthier residence thanks to UBI, which ultimately led to them experiencing better living conditions, happiness and well-being. peace of mind.

Of course, there are many other important aspects to consider regarding UBI. But it’s certainly worth looking into, especially since societies that have tried it have experienced financial increases for their most vulnerable members, in addition to great benefits in terms of improved quality of life and long-term financial stability.

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