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Social Europe, 21 October 2024
Interest is surging in the idea of a Universal Basic Income (UBI) – a regular income paid by the government to each adult member of society, regardless of their personal or financial circumstances. But can it achieve its stated goals of reducing poverty, improving working conditions and increasing well-being? Thanks to a global flurry of pilot programmes putting these claims to the test, answers to this question are starting to trickle in.
In 2020, 1,000 low-income individuals in the US states of Texas and Illinois began receiving $1,000 per month for three years as part of America’s largest-ever study on UBI. No conditions were attached – participants could use the money as they wished. The results of this large-scale and meticulously conducted randomised control trial offer a fascinating insight into how people might spend their time and money if they were guaranteed a no-strings basic income.
Spending increased, going mainly to food, rent and housing, as did savings. Time spent in employment decreased (by 1.3 hours per week) – not a bad thing in the eyes of UBI advocates, who insist that the goal of UBI is not to increase overall employment but to put pressure on employers to improve job quality and to allow people to devote more time to lifelong learning and to unpaid, often more socially valuable work, such as caregiving. Among those looking for work, participants were more selective about the jobs they applied for and more likely to state “interesting or meaningful work” as a requirement.
On health, the increased income had insignificant effects on most indicators – not too surprising, given that the study took place over three years, while health problems develop over lifetimes. However, mental health was one clear exception consistent with other studies on basic income-like interventions. The study found “large improvements… in mental health measures like stress and psychological distress.” This could be observed, however, only during the first year of the experiment. Why was this improvement so short-lived?