evelyn forget: the town with no poverty. what happens when you give an entire town a guaranteed...
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THE TOWN WITH NO
POVERTY
What happens when you give an
entire town a guaranteed annual
income?
I am indebted to Charles Burchill and Oke Ekuma for programming assistance, to CIHR for financial support (MOP 77533),
and to MB Health and Healthy Living for data access. No official endorsement by MB Health and Healthy Living
is intended or implied.
MINCOME (1974 – 1978)
• In 1974, the governments of Canada and
Manitoba implemented a large field
experiment to assess the impact of a
Guaranteed Income
• One of 5 North American GAI experiments
• Part of a general reform of social safety
net
Payouts were modest
• Set up as a refundable tax credit (negative
income tax)
• Someone with no income would receive
60% of the LICO – about what they would
receive from social assistance
• An additional $1 from other sources would
reduce their benefit by 50 cents
Payouts were modest
• People who had previously been receiving
income assistance would see little change
in terms of the money they received, but
they had fewer “rules” to accommodate
• The working poor would see substantial
increases in their incomes
MINCOME
• 2 experimental sites
– A dispersed sample in Winnipeg
– A saturation site in Dauphin, MB
• The Dauphin site was the only saturation
site in any of the 5 experiments: every
family was eligible to participate
MINCOME
• Was designed to find out what effects a
Guaranteed Annual Income would have on
the labour market
Labour market results on
Winnipeg sample:
• Researchers who examined the Winnipeg
sample found that people who received a GAI
worked fewer hours
BUT
Labour market results on
Winnipeg sample:
• Little reduction among adults working full-time
jobs
• Significant effects for:
– Married women returned to work less quickly after
childbirth
– Adolescent children entered the workforce later and
reduced their hours of work significantly
Health and Social Effects?
• Research funding for analysis ran out midway
through the experiment
– Families were paid
– Research concentrated on labour market
• Social issues were not a primary research
question
– Data collected (by questionnaire)
– No database constructed for social issues
– No significant analysis of social issues
Health and Social Effects?
• 1800 boxes of “data”:
– paper copies of administrative records,
– questionnaires,
– reports of embedded anthropologists and
sociologists who lived in the communities
– Interviews with subjects on social and family
interactions, labour market activity, decision-
making etc.
• Limitations on our ability to contact
participants
Is there another way to get at
the impact in Dauphin?
No analysis on Dauphin sample
had ever been conducted
The project ran from 1974 to
1978
EDUCATION?
Grade 12 Enrolment as % Previous Year Grade 11
Enrolment
0.0
20.0
40.0
60.0
80.0
100.0
120.0
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
Dauphin
Winnipeg
Non-Winnipeg
MCHP Information-Rich Environment:
Using Administrative Data
Population
Registry
Hospital
Home Care
Pharmaceuticals
Cost Vital
Statistics
Provider
Nursing
Home
Physician
Family
Services Education
OUR CHALLENGE
• Many things have happened since 1974
• How do we know that any changes we find
are the result of MINCOME?
SOLUTION
• We need to find a group of people who
were similar to those who lived in Dauphin
but who did not participate in the
experiment
• Then we can compare how they did with
how the Dauphin folks did
First:
• We matched on geography
• We only considered people who lived in
towns similar to Dauphin
DAUPHIN
Then we matched on other
characteristics:
• Individual: age, sex
• Family: number of children, single parent
female led
• Community: rural/small town
We compared everyone who lived
in Dauphin to 3 other similar
people:
• Excellent matches on all the matching variables
• We also looked at the 1971 census to make sure that they were not different in other ways (religion, ethnicity, employment variables, etc.)
We found:
• Significant differences in:
– % farmland planted in canola
– Ethnicity (Dauphin is more “Ukrainian”) –
about 31% versus 10%
• Does ethnicity matter?
OUR RESULTS….
WERE THEY HEALTHIER?
• No direct measure
– We examined contacts with the healthcare
system
In 1973
Dauphin residents experienced:
19.23 more hospitalizations
per 1,000 population
+/- 2.096
(95% confidence level)
By the second half of 1978
• The differential fell to zero
• Hospitalization rates for Dauphin residents
fell 8.5% relative to the controls
• In 1978, Canada spent $ 7.4 billion on
hospitals
• In 2010, Canada spent $50.4 billion
HOSPITALIZATIONS
1974 1978
Comparison
group
Dauphin
Rates
Let’s look closer….
HOSPITALIZATIONS: accidents
and injuries
1974 1978
Comparison
group
Dauphin rates
HOSPITALIZATIONS:
mental health diagnoses
1974 1978
Comparison
group
Dauphin
rates
Contacts with family doctors:
same pattern
• Significant reduction in number of visits by
Dauphinites relative to controls
• Mental health issues seemed to be the most
significant reason for the decline
Were there other effects?
We looked at:
• Birth outcomes
• Birth rates
• Divorce rates
Why might birth outcomes be
affected by poverty?
Birth Outcomes
• Low Birthweight, At-risk birthweight, Small for gestational age births, perinatal death
– No effect found
• Why? – Small numbers
– Universal health insurance in Manitoba (unlike US)
– Rural area (poverty does not manifest as food insecurity)
Birth and Divorce rates are affected
by many factors
Birth rates did not increase.
• Fertility fell all across North America
during the 1970s, especially in rural areas
The birth control pill had just become legal and
available
• Measured in a variety of ways, fertility fell
further and faster among Dauphin women
than among controls
Divorce Rates
• In one US experiment researchers found
an increase in the divorce rate
• The guaranteed income was labeled “an
attack on the American family”
• No effect was found in Dauphin
CHILDREN MAY HAVE BEEN
MOST AFFECTED
• Stayed in high school longer
• Had first child later
• Had fewer children over a lifetime
But how did the families
perceive MINCOME to have
affected their lives?
These results are based on
interviews conducted by Lindor
Reynolds for the Free Press
Amy Richardson
(83)
Richardson family
1970s
Amy Richardson (83):
• She ran the Dauphin Beauty Parlor from
her home
• Her husband retired at 53 because of
health problems
• 6 children
• Used the extra money for luxuries like
school books
• “It was to bring your income up to where it
should be. It was enough to add some
cream to the coffee. Everybody was the
same so there was no shame.”
Hugh and Doreen Henderson
Hugh and Doreen Henderson
• Lived in the country: raised chickens and
grew their own food
• He was a school janitor
• She stayed home with the 2 children
Hugh:
• “If a kid wants an education, and he’s
willing to pay for it, I think the government
should help. If we’d have had more
money, I’d have loved to pay for university
for my kids.”
Doreen:
• “Give them enough money to raise their
kids. People work hard, and it’s still not
enough. This isn’t welfare. This is making
sure kids have enough to eat.”
• “They should have kept it. It made a real
difference.”
Rick Zaplitny (58)
Rick Zaplitny
• Was a chartered accountant and his
income was too high to qualify for
MINCOME support
• “We always felt the problem with the
welfare system is it was punitive. You
made money, and they took it away from
you.”
• “It seemed to us that MINCOME was for
people who were on that line. They
weren’t deadbeats. They needed a bit of a
boost.”
• “I’d be in favour of it [now]. Helping
someone have a decent living wage is
hard to argue with.”
Are these results still
applicable in the 21st century?
• Potential savings in other social programs
associated with poverty
– Education and special education, criminal
justice, health, family violence
• Potential savings in bureaucratic
duplication
– GAI is simple to run as a refundable tax credit
through the income tax
• Social workers can be reallocated away
from spending time trying to find ways to
get people money and towards actually
helping people who need help with
addictions or family issues
MOST IMPORTANT
• A GAI empowers families to make their
own decisions – and their own mistakes
• A GAI does not infantilize people and
encourage dependency
New interest around the world
LOW AND MEDIUM-INCOME COUNTRIES
• “Unconditional cash transfer schemes”
supported by World Bank as a means of
addressing poverty in developing world
– Incredible Success
– Largest effects on health and education of
girls
New interest around the world
HIGH INCOME COUNTRIES
• Calls from advocates in Ireland, France,
Germany, Switzerland, Italy, Korea,
Japan, UK
• “Experiments” being contemplated and
proposed by BBC (!!), Canadian health
researchers and individuals
Is this scheme worth
considering seriously in high-
income nations?
QUESTIONS?
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