The town that eliminated poverty

New data shows guaranteed income improves quality of life

Aranda Adams

Imagine a town with no poverty. For University of Manitoba professor Evelyn Forget, no imagining is required.

According to her research, released in early October, that town was Dauphin from 1974 to 1978 during the $17 million Guaranteed Annual Income (Mincome) research experiment.

Lack of funding and political interest has kept the results of the experiment in a box, unanalyzed. But newly available data and health administration databases have allowed researchers to study the health and education effects of eliminating poverty.

Not only did the annual guaranteed income support help Dauphin residents stay above the poverty line in a financial sense, it also improved residents’ quality of life.

Originally designed to test what impact guaranteed income would have on people’s decision to work, Mincome provided Forget with a unique natural experiment to look at the impact of poverty through health and education outcomes.

“Kids [that were part of Mincome] stayed in school longer and people used hospitals less, especially for accidents and injuries and mental health reasons,” said Forget.

What was surprising, she notes, is the strength of the findings. Even though only 30 per cent of the families qualified for support, “many people benefited from Mincome, and not only those who received payments under the scheme,” said Forget.

Participants at Mincome’s sister site in Winnipeg had similar outcomes. Even with guaranteed income, participants still chose to work.

Kids [that were part of Mincome] stayed in school longer and people used hospitals less, especially for accidents and injuries and mental health reasons.

Evelyn Forget, U of M

“The effect of guaranteed annual income on employment and labour supply was very small,” said Wayne Simpson, the University of Manitoba economist who worked with Mincome research director Derek Hum to analyze the labour market results.

While these findings suggest poverty could be alleviated today through a Mincome-like program with little impact on employment, the true costs and benefits of delivering this type of program would need to be examined.

“Someone needs to estimate the savings associated with reduced bureaucracy, better education and health outcomes, and probably lower costs associated with crime and special education and other costs associated with poverty,” said Forget.

Elements of this program already exist in the Employment Income Assistance program and the Child Tax Benefit.

Administrative challenges like determining eligibility and co-ordinating payments to recipients could be overcome. The biggest challenge would be political.

Combining existing programs or removing and replacing programs “implies there might be winners and losers, depending on how generous [the program] is,” said Simpson.

Further, a program of this size would “require people to imagine big changes and to talk across party lines and jurisdictional lines. I just don’t see that kind of imagination at work in our political process these days,” said Forget.

Published in Volume 64, Number 11 of The Uniter (November 12, 2009)

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