It’s an unprecedented – and massive – experiment: Since 2017 the U.S.-based charity GiveDirectly has been providing thousands of villagers in Kenya what’s called a “universal basic income” – a cash grant of about $50, delivered every month, with the commitment to keep the payments coming for 12 years. It is a crucial test of what many consider one of the most cutting-edge ideas for alleviating global poverty. This week a team of independent researchers who have been studying the impact released their first results.
But importantly, how that money is given is important to the outcome. It looks like lump sums are better than regular payments at creating new enterprise.
Most importantly is that money given to the poor is put directly back into the local economy vs squirreled away in an offshore account.
https://www.npr.org/sections/goatsandsoda/2019/12/02/781152563/researchers-find-a-remarkable-ripple-effect-when-you-give-cash-to-poor-families
It’s interesting, because this is a widely known concept in the finance world. Lump sum investing in the stock market is more profitable than dollar cost averaging that same amount over time ~66% of the time. It seems that holds true in non-stock market investments into people as well. They’re better off getting a lump sum investment into their accounts than having that money DCA’d to them.