Evaluating Universal Basic Income: Design, Implementation, and Outcomes

Thesis Abstract

This study investigates the design, implementation, and outcomes of a pilot Universal Basic Income (UBI) program to address persistent poverty and income volatility in urban and peri-urban communities. The problem addressed is the insufficiency of targeted welfare programs to remove poverty traps and stabilize consumption amid rising inequality and labor market disruptions from automation. The aim is to evaluate how a monthly UBI voucher influences household welfare, labor supply decisions, consumption smoothing, and social well-being, with specific objectives (1) to assess changes in per-capita consumption and poverty incidence; (2) to examine effects on work incentives and formal/informal employment participation; (3) to analyze impacts on health, education investment, and mental well-being; (4) to identify implementation challenges, administrative costs, and leakage; and (5) to develop a policy design framework for scalable UBI deployment. The theoretical lens combines Amartya Sen’s capabilities approach, Keynesian notions of aggregate demand, and Birnbaum’s incentive-compatible design to frame expected welfare and labor responses. The methodology adopts a mixed-methods design comprising a quasi-experimental, non-randomized control–treaty comparison across three municipalities selected for demographic diversity and program fidelity. The population includes approximately 40,000 residents, with a treatment group of 12,000 beneficiaries and a matched comparison group of 12,000, supplemented by a qualitative subsample of 60 in-depth interviews and 30 focus groups with participants, program administrators, and local employers. Data collection instruments include household survey modules capturing income, consumption, asset holdings, employment status, health indicators, education expenditure, and subjective well-being, alongside administrative records on program delivery, tax credits, and welfare transfers. The study employs a difference-in-differences (DiD) framework complemented by synthetic control methods to estimate causal effects on welfare and labor outcomes, with regression analysis controlling for baseline heterogeneity, demographic characteristics, and macroeconomic shocks. The analysis of health and education channels utilizes logistic and linear regression models, while consumption smoothing is examined through time-series household budget data and Engel curves. A thematic analysis of interview and focus group transcripts is conducted to identify perceived barriers, trust in governance, and community solidarity effects, supported by NVivo coding and triangulation with quantitative findings. Robustness checks include placebo tests, propensity score matching to adjust for selection bias, and sensitivity analyses across alternative bandwidths and model specifications. Expected findings anticipate that a moderate monthly UBI reduces poverty headcount and enhances routine consumption stability, while modestly increasing formal employment in sectors with labor shortages and reducing reliance on informal networks. Health and mental well-being indicators are projected to improve due to reduced financial stress, with increased investments in child education and preventive care. However, potential trade-offs may include higher administrative costs, leakage through alternative income channels, and contingent effects on local wage dynamics depending on cost structure and regional labor demand. The study’s contribution to knowledge lies in providing rigorous, context-sensitive evidence on UBI design parameters, administrative feasibility, and multi-dimensional welfare effects, advancing the literature on unconditional transfers within developing and middle-income country settings. Policy implications include recommendations on transfer magnitude, frequency, eligibility criteria, and integration with existing social protection schemes to maximize impact while maintaining fiscal sustainability. The main conclusion is that carefully calibrated UBI can enhance household welfare and resilience without inducing substantial work disincentives when designed with transparent governance, targeted cost controls, and complementary employment programs. The study recommends scalable pilot frameworks with clear metrics for ongoing evaluation, phased rollouts, data-sharing protocols, and stakeholder engagement mechanisms to inform national policy deliberations on universal social protection.