Simpson, et al, “The Manitoba Basic Annual Income Experiment: Lessons Learned 40 Years Later”
Three University of Manitoba economists, Wayne Simpson, Greg Mason, and Ryan Godwin, have jointly authored a new research paper about the Manitoba Basic Annual Income Experiment (“Mincome”), a trial of a guaranteed income that took place from 1974 to 1979.
The Mincome experiment consisted of randomized studies in Winnipeg and rural Manitoba, as well as a saturation study in the town of Dauphin, where all residents were eligible for participation in the study. Participants received an income supplement that was phased out as personal earnings increased, and several combinations of minimum income level and taxation rates were tested. The guaranteed income scheme tested, a negative income tax, is equivalent in its distributional effects to a basic income that is taxed back with personal income over a certain amount. Decades after Mincome ended, its outcomes were analyzed by economist Evelyn Forget. The results are now frequently mentioned as evidence of the effectiveness of basic income / negative income tax.
At present, the province of Ontario is preparing a new major trial of a guaranteed income (which, as in Mincome, is likely to be designed as a negative income tax). In a lengthy discussion paper about the new trial, project advisor Hugh Segal notes that the Dauphin saturation study, showed “population health improvements, the potential for government health savings, and no meaningful reduction in labour force participation.”
In their new article, Simpson, Mason, and Godwin re-examine Mincome, and consider how it might answer questions about contemporary experiments in Ontario and elsewhere.
The recent announcements of the Ontario Basic Income Pilot and Finland’s cash grants to jobless persons reflect the growing interest in some form of guaranteed annual income (GAI). This idea has circulated for decades and has now been revived, no doubt prompted by concerns of increased inequality and employment disruptions. The Manitoba Basic Annual Income Experiment (Mincome), conducted some 40 years ago, was an ambitious social experiment designed to assess a range of behavioural responses to a negative income tax, a specific form of GAI. This article reviews that experiment, clarifying what exactly Mincome did and did not learn about how individuals and households reacted to the income guarantees. This article reviews the potential for Mincome to answer questions about modern-day income experiments and describes how researchers may access these valuable data.
Wayne Simpson, Greg Mason and Ryan Godwin (2017), “The Manitoba Basic Annual Income Experiment: Lessons Learned 40 Years Later,” Canadian Public Policy.
Reviewed by Cameron McLeod
Photo: Northern Lights in Manitoba, CC BY-NC-ND 2.0 AJ Batac