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Paper short abstract:

This paper explores how a universal unconditional cash transfer – a basic income experiment –, handed out in a rural Ugandan village, yielded long-lasting (after the end of exposure) impacts on recipients’ employment, savings and investment patterns, despite the emergence of the COVID-19 pandemic.

Paper long abstract:

The impacts of cash transfer (CT) programs on employment and savings, investment and production have been quite widely analysed by the literature. In particular, while the evidence base on savings and investment points at positive findings, the proofs produced concerning business and enterprise patterns indicate more mixed effects. Furthermore, the hypothesis – representing one of the main criticisms drawn against social assistance programs – that CTs would disincentivize work, has not yet been proved (if anything, rather disproved) by the available evidence.

Less is known about the sustainability (namely, the persistence after end of exposure) of CT impacts, as these programs are traditionally conceptualized as short-term social interventions, insufficient, by design, at yielding long-lasting and transformative benefits in recipients’ livelihoods. However, the (scarce) related empirical literature seems to provide hints validating the contrary, with positive program consequences persisting (even years after CTs’ cessation), on a variety of outcomes, including employment, savings and investment.

In this context, this paper uses a quasi-experimental matching approach to explore the sustainability of the effects of a universal unconditional cash transfer (as such, a basic income experiment), implemented in a rural Ugandan village. Despite the concurrent outbreak of the COVID-19 pandemic, sustained or long-term impacts – with interesting gender differences – were recorded on, amongst others, savings, (agricultural) incomes and business ownership.

In sum, the article aims at contributing to the debate on the transformative potential of alternative types of social protection to make their recipients resilient to the (increasingly frequent) crises of our times.