findings:ubi significantly decreases debts; results go beyond direct monetary value; households did not have to work for lenders/to pay off debt
channels:directly enables debt reduction; reduces debt-dependency risks; avoids taking on new debt; enables choosing less exploitative forms of borrowing
findings:ubi significantly increases savings; allowed increasing economic security/empowerment of households
channels:shift to institutionalized saving strengthening shock resilience; schooling of the household head, landholding, caste and household size also affect savings
notes:ubi paid in addition to any other state transfers; included in sample for effects on work choice (forced to work for debtors, free to pursue own-work)
An experimental study on the effects of providing UBI for villages in India on absolute low-income household debts, utilizing a combination of qualitative and quantitative experimental research.
It finds that the provision of UBI significantly reduced household debts, finding generally agreeing with assumptions in the literature, but goes beyond this by investigating the qualitative causes going beyond purely monetary value into what the authors call 'emancipatory value'.
They find UBI reduces dependency risk - primarily to lenders with high associated fees by allowing the repayment of existing debt, not having to work for the lender directly or by providing them parts of their wages, avoiding taking on new debts and, if new debts have to be taken on, allows choosing less exploitative forms of borrowing (such as from relatives or friends).
The last channel especially is a point of interest of the study:the intervention did not just reduce absolute debts through an individual possessing more money, it generally infused more money into the local contexts, reducing its scarcity and allowing others such as neighbors and friends to provide more collective risk spreading in the villages..
The intervention also significantly increased possibility of saving in treatment households, allowing for an increased economic security and empowerment, which was also influenced by houshold head education, landholding, the household's caste and size.
The main channel this is accomplished through is a shift to institutionalized saving, with provides increased resilience against shock events.
