A groundbreaking three-year study in Germany has delivered compelling evidence challenging common criticisms of Universal Basic Income (UBI), showing no reduction in work effort while significantly improving mental health and wellbeing.
The Pilotprojekt Grundeinkommen, conducted by the German Institute for Economic Research (DIW Berlin) in collaboration with the Vienna University of Economics and German NGO Mein Grundeinkommen, gave 107 participants €1,200 monthly for three years with no strings attached. Unlike other UBI pilots, this study was entirely privately funded through donations collected by Mein Grundeinkommen, allowing researchers to design an experiment that wouldn’t reduce participants’ existing government benefits.
From over two million applicants, researchers selected approximately 1,700 individuals aged 21-40 living in single-person households with monthly net incomes between €1,100-2,600. From this pool, 107 were randomly assigned to receive the basic income, while the remaining 1,580 formed the control group. Data was collected through semi-annual surveys over the entire three-year period from June 2021 to May 2024, with impressive retention rates—80% of the control group participated throughout the study’s entire duration.
Key Findings Challenge Critics
The most significant finding contradicts the “welfare dependency” argument often used against UBI. “Recipients didn’t withdraw from the labor market or significantly reduce their working hours. This challenges the ‘social hammock’ stereotype that people would stop working if given unconditional money,” explains Jürgen Schupp, scientific lead from DIW Berlin.
Instead of inducing laziness, the cash transfers enabled responsible financial decisions. Recipients saved approximately 37% of the payments and directed around 7% toward charitable causes or supporting family and friends.
Mental Health Benefits Equivalent to Therapy
Perhaps most striking were the substantial improvements in wellbeing. The study documented improvements in mental health by 0.347 standard deviations, purpose in life by 0.250 SD, and life satisfaction by 0.417 SD.
“I was particularly impressed by how UBI positively affected mental health – the effect is comparable to therapy! This is especially relevant after COVID” notes Miriam Witz, project lead at Mein Grundeinkommen.
Autonomy and Pro-Social Effects
The study revealed a pattern of increased social connection and autonomy among recipients. Participants spent more time with friends while maintaining their working hours and reported greater control over their lives.
“The strongest effects were in autonomy and what we call the ‘gender effect’ – the more dependent someone is in society, the stronger the basic income effect. There’s a strong correlation between mental health and dependency structures,” Witz explains.
The Future of UBI Research in Germany
The research team is already planning next steps. “On May 1st, we’re launching a new €500,000 basic income lottery which will also be researched. We’re commissioning a potential analysis of what UBI would mean macroeconomically for society in light of our study’s findings – without false assumptions like decreased work activity,” says Witz.
Schupp adds, “While a basic income isn’t currently on the political agenda, I believe that for the urgently needed restructuring of social systems, all reform options must be considered – including universal basic income.”
Witz, who didn’t begin as a UBI advocate, says the experience changed her perspective: “I’ve come to believe that the ability to say ‘no’ is very important in our society. We need an instrument that enables as many people as possible to be involved in decision-making processes – and in capitalism, that prerequisite is money.”
The findings align with other research showing that financial security, social connection, and autonomy are fundamental to mental health and wellbeing, suggesting that basic income could be a valuable tool for building resilience in modern societies.
This article is based on an interview for Unconditional Basic Income Europe conducted by Dániel Fehér.
More about the study and its results:
Sandra Bohmann, Susann Fiedler, Maximilian Kasy, Jürgen Schupp and Frederik Schwerter: Cash Transfers, Mental Health, and Agency: Evidence from an RCT in Germany (Preliminary research paper)
Sandra Bohmann, Susann Fiedler, Maximilian Kasy, Jürgen Schupp and Frederik Schwerter: Pilotprojekt Grundeinkommen: kein Rückzug vom Arbeitsmarkt, aber bessere mentale Gesundheit (DIW Wochenbericht 15 / 2025, S. 221-229)
Pilotprojekt Grundeinkommen (in German)
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