UBI’s Impact on Work Culture: Not a Question for the Experimenters

UBI’s Impact on Work Culture: Not a Question for the Experimenters

My interest in basic income stemmed from the conjecture that such a policy could help to ignite a progression away from the culture of total work. However, there are many open empirical questions regarding the exact way in which a basic income would (or would not) influence work-related attitudes and behaviors.

One might hope that current and planned experiments will shed some light on this topic. My claim in this article is that this is not likely to be the case: the impact of basic income on work-related attitudes and behaviors is not readily amenable to experimentation.

 

1. Fixing the Viewpoint: Opposition to the Culture of Work

When I began casually following the basic income movement in 2015, and when I began volunteering for Basic Income News in November of that year, I was tentatively attracted to the policy as a means to subsidize lifestyles like downshifting and what I’d come to call anti-careerism – the rejection of idea that one’s life course should be structured and defined by a career path.

At that time, I was unaware of the movement’s budding interest in experimentation. I did not realize that the center-right federal government of Finland was about to declare its intention to fund an experimental trial of basic income, or that the provincial government of Ontario was also preparing to design and implement a trial of guaranteed minimum income.

I did not foresee the global surge of interest in experiments and pilot studies that would happen soon after the commencement of my volunteership. But happen it did, and thus, as a writer for Basic Income News, I was committed to expend considerable effort covering the current basic income implementation trials. Moreover, as a “just the facts” news reporter, it was my duty to report on them without allowing my own personal misgivings to show through (although I did have occasion to leak my skepticism in the Op-Ed section). As a result, I was often mistaken for someone with a genuine and favorable interest in basic income experiments.

Through it all, my main interest in basic income remained the conjecture that the policy might act as a subsidy for downshifting, anti-careerism, and working without pay, and thereby help to displace society’s overvaluing of selling labor for money. While such an “anti-work” approach to basic income is highly controversial, I will assume this perspective throughout the present article. (Those who do not share it may either accept it for the sake of argument or stop reading.)

Such an approach to basic income rests on untested empirical conjectures. In fact, however, many questions remain open. Would individuals living in a society with basic income come to hold different views about the role and importance of jobs? Would they fail to view an occupation or career as integral to self-identity? Would they deny that a high salary or professional advancement is essential for personal success? Would they ascribe greater value to self-development and social contributions that occur outside of paid work? Would they tend to prioritize activities that are rewarding in themselves over activities that contribute to professionalization and employability? To what extent would basic income actually enable people to lead lives without full-time or continuous jobs? It is sufficient to empower individuals to work fewer hours? (Probably not.) Would it permit some to withdraw from the labor market completely?

Some proponents take for granted that basic income would usher in a society in which the pursuit of passions is more important than paid work. Such optimistic predictions, however, must be moderated against the reality that the culture of work is deeply entrenched. When critics contend that it’s premature to “give up” on the goal of full employment, the normative assumptions behind their rhetoric should not be ignored: secure full-time jobs and careers remain central to the identity and self-worth of many who have them, and central to the goals and aspirations of many who don’t. Even more unsettlingly (in my view), many supporters enthusiastically maintain that basic income would not result in lower rates of employment–and might even increase work effort (as is the hypothesis behind Finland’s experiment, which is designed primarily to assess whether unemployed individuals would be more likely to accept work if their benefits were made unconditional). Some argue that it would act as a stimulus to business and grow the economy, never pausing to question the ethos of paid work and productivity.

We simply don’t know the long-term effects of basic income on work-related attitudes and behaviors. Given the myriad of unanswered empirical questions, one might guess that I would have been heartened to witness the unexpected onslaught of experiments that occurred during my volunteership with Basic Income News. But I was not: unfortunately, it is unlikely that the present wave of experiments will yield insight into the empirical concerns that interest me and others who approach basic income from the “anti-work” perspective.

 

2. Five Limitations of Experiments

I believe it’s possible that basic income could precipitate a mass transformation of work-related behavior and attitudes but, if so, it most likely occur through long-term, society-wide processes. Experiments, in contrast, are necessarily (1) limited in duration and (2) restricted to a subset of the population (rather than “universal”).

And experiments have other shortcomings. For instance, they must be (3) designed to prevent subjects from being financially worse off as a result of participation, whereas any “real-world” UBI would almost certainly be introduced in tandem with a funding mechanism that causes some individuals to be net payees. Finally, as existing experiments have been designed, the target populations (4) consist of low-income individuals, the unemployed, and/or welfare recipients, and (5) consist mainly of adults who have already been acculturated into the present society and its ethos of work and consumption.

 

2.1 Experiments are limited in duration.

Most of the current BI-related experiments are two or three years in length. In the United States, the non-profit YC Research plans to launch an experiment in which some participants receive cash transfers for five years. The only projects of longer duration are taking place in developing nations: GiveDirectly is providing a 12-year basic income to 40 villages in its major experiment in Kenya, and the Brazilian non-profit organization ReCivitas has introduced a “lifetime basic income” in the village Quatinga Velho (note that the latter is not an “experiment” in the scientific sense). Even if longer term experiments were affordable, the pressure to obtain results would generally militate against them.

The short-term nature of experiments poses at least two major shortcomings vis-à-vis our present interests:

First, the payments’ limited duration disincentivizes financially risky behavior, such as abandoning a job or career. We should expect that few individuals would choose to make radical changes to their work and life if they are guaranteed unconditional cash payments for only two or three years. A two- or three-year gap in employment might jeopardize not only one’s ability to return to one’s former job or career path but also one’s general future prospects in the labor market.

Secondly, let’s assume that some participants do radically alter their workforce participation despite the short-term nature of the experiment (e.g. they might use the money to help provide financial security during the process of downshifting from a lucrative full-time job, with the confidence that the experiment’s timeframe is long enough to permit them to settle into stable part-time employment or freelance work). Under a society-wide and permanent basic income, such “first movers” might inspire others also to seek alternatives to the norm of full-time permanent employment, initiating a sort of ripple effect whereby downshifting and other such alternative lifestyles gain in practice and acceptance. A two- or three-year experiment, however, is unlikely to be long enough to observe these more slowly accruing effects on social attitudes toward work.

Stated otherwise: a basic income might enable some individuals to voluntarily accept less money pay through work, reduce their time in the labor market, or even cease employment entirely (especially in the many non-USA nations in which benefits such as healthcare are not dependent on full-time employment). It might, for example, liberate those who had already been keen to adopt such a lifestyle (say, downshifting) but were restrained by, and only by, the lack of a stable financial safety net. Meanwhile, however, other would-be downshifters might remain hesitant. The latter group might include, for instance, those who have been held back by not only financial anxiety but also fear of social marginalization. Over time, however, an increased prevalence and visibility of downshifting could increase the lifestyle’s social acceptability, thereby reducing its stigmatization and rendering more attractive to more people (which would further increase its visibility and social acceptance, and so on).

Of course, this is purely speculative. Even if a basic income were to bring about increase in the number and visibility of downshifters (which itself is uncertain), this might lead not to social acceptance but to angry complaints about “parasitism” and further stigmatization. But the point is just that experiments are unlikely to reveal which outcome would transpire.

Indeed, moreover, some of the effects basic income on social attitudes toward work might develop over generations. Perhaps children and teens would develop less material-driven aspirations if they were to grow up in a society in which basic material security is taken for granted; perhaps they would place less weight on monetary considerations when choosing work or other projects and pursuits. Perhaps they would not internalize the moral imperative that one must “earn a living” through paid labor. Perhaps it would merely seem intuitive to them to conceptualize work and income as independent. Perhaps, in turn, they would conceive of the value of work in terms other than income, such as the good it brings to the world and the satisfaction it provides to the worker. Views that are counternormative in our own society might come naturally to those raised in world with universal basic income…

But we certainly can’t be confident about any of that, and experiments will not help.

 

2.2 Experiments are not “universal” in scope.

As I have written elsewhere, a bigger question than “What would you do if your income were taken care of?” is “What would you do if everyone’s income were taken care of?” What a financially self-sufficient individual would choose to do in a society of full-time workers is not necessarily identical to what that same financially self-sufficient individual would choose to do in a society in which everyone could afford to live without a job.

Experiments require a control group. This effectively prevents an experimental test of a truly universal basic income. Now, to be sure, some experiments do aim to include universality in their design. In GiveDirectly’s experiment, for example, the experimental units are not individual people but entire villages. In this major study, the treatment groups are each composed of communities in which all individuals are receiving unconditional cash transfers. An earlier experiment in the Indian state of Madhya Pradesh also implemented a basic income in several villages, using similar villages as controls. There is even precedent in the developed world: the much-discussed “Mincome” experiment, a negative income tax experiment conducted in Manitoba in the 1970s, used the town of Dauphin as a saturation site; every resident of Dauphin was unconditionally guaranteed a minimum income from 1974 to 1979, when the experiment was terminated.

No current experiment in the developed world, however, includes the use of a saturation site (even though Hugh Segal, the adviser to the Ontario pilot study, initially recommended it). In Finland, the experimental group consists of a random sample of 2,000 individuals who had previously been receiving federal unemployment benefits. Similarly, in the Dutch municipal experiments, participants have been randomly selected from current welfare beneficiaries residing in the respective cities, and Barcelona’s experiment involves a stratified sample of welfare recipients within one of the city’s most impoverished neighborhoods. In Ontario, experimental groups will be randomly selected from self-selected applicants, where eligible applicants are restricted to low-income individuals from three specific regions of the province. And YC Research has designed its experiment as a randomized controlled trial with a target population of low-income young adults in two regions of the US. (See this summary for more information on the design of the experiments.)

A consequence of these design decisions is that all of the above experiments will fail to capture social multiplier effects. For an example of social multiplier effects in the context of minimum income experiments, consider one of the most striking results from Dauphin: an increase in high school graduation rates. Last year, I attended a talk by Evelyn Forget, the scholar responsible for the analysis of the experiment, wherein she described survey data that revealed that the decisions of Dauphin teens to remain in school were due not only to the financial security of their individual families but also to the fact that their peers were able to stay in school as well.

We should expect that work-related behavior could also be susceptible to social multiplier effects. Like teenagers’ decisions to stay in school, adults’ decisions to withdraw from full-time employment might depend not only on their personal financial status but also on the actions of their peers. An individual with a personal source of passive income might be financially able to quit her job, and even desire to do so, but nonetheless choose to remain employed if – and because – her friends and coworkers stay in their jobs. She might, for example, believe that she would become socially isolated if she were to opt out of work while her peers remained in full-time employment. She might think about her lack of friends available before 5 pm on weekdays, or she might feel pressure to continue to earn enough money to continue to engage in costly dining, entertainment, and other activities with friends who remain lucratively employed. She might fear a lack of sympathy or understanding, even ostracism, if she were to become the only person within her peer group to abandon traditional employment.

Furthermore, as discussed above, the potential impact of basic income is not limited to the liberation of those who already desire to downshift; another possibility is that, through social multiplier effects, a basic income could generate this desire in those who had not previously considered the option. Our attitudes and aspirations are also influenced not only by our private circumstances but also by our observations of others’ choices lifestyles, and by our perception of what is socially acceptable. Some who now lack any interest in downshifting might develop one in the face of social or structural changes that legitimate or popularize the lifestyle.

Even experiments with saturation sites would be insufficient to permit us to assess all of these potential effects; the social, cultural, and economic forces that impinge on work-related attitudes and behavior vastly exceed the local scale.

 

2.3 Experiments exclude net contributors.

A “real world” basic income would almost certainly be introduced in conjunction with tax increases to help to finance the program, which would likely include higher income taxes on top earners. But researchers cannot ethically introduce manipulations that leave some subjects worse off as a result of the experiment. Consequently, tax increases cannot be part of experimental trials. This limits the ability to test how the full policy package would affect work-related behaviors. Even those that have studied taxes and come from financial education backgrounds such as through Northeastern University wouldn’t be able to test how different experiments could affect society and financial systems.

For one, it’s not basic income per se but redistribution – reduction of inequality – that carries the greater potential to curb the demand for positional goods. As mentioned above, a worker might hesitate to downshift if the maintenance of social relationships requires engagement in costly dining, drinking, entertainment, or luxury holidays. In a society with high inequality, a mere basic income might do little to reduce the demand for positional goods, limiting the temptation to downshift or opt out of paid work to live on a subsistence income. Many might continue to feel the need to wear nice clothing, drive a new car, and live in an affluent neighborhood to be taken seriously in society, and thus might continue to prefer greater earnings to greater leisure, despite the possibilities opened by the introduction of a basic income. Conversely, the less that one perceives one’s social status to depend on spending and consumption, the more one might be inclined to trade higher earnings for more leisure time. Policies that mitigate financial inequality, such as progressive taxes on wealth and income, help to address this barrier to downshifting.

Additionally, policies that stymie the ability to become “filthy rich” might discourage those who would otherwise be inclined to choose jobs and careers based primarily on their prospects for financial gain. Sufficiently high income taxes could reduce the role of monetary incentives in selecting work. Limitations on wealth acquisition might push some would-be profiteers to instead seek work that they could find non-monetarily rewarding.

Such effects could enhance the ability of a “basic income plus tax reform” package to transform work-related attitudes and behavior; however, they are bound to be missed in experiments.

 

2.4 Existing experiments are restricted to low-income populations.

So far, we have focused on limitations that are destined to afflict all basic income experiments, merely in virtue of the nature of experiments. Let’s now turn to a contingent design decision that constrains all current experiments in developed nations: in each experiment, as mentioned above, the target population contains only individuals who are low-income and/or receiving social assistance or unemployment benefits or other benefits or with incomes falling below a certain level.

To be fair, none of the existing experiments have been inspired by questions like “Can basic income provide a subsidy for downshifting?” or “Would basic income promote the acceptance and desirability of lifestyles outside of full-time employment?” On the contrary, most are motivated by the desire to determine whether unconditional cash transfers would be more effective than existing programs in addressing poverty or unemployment. In this light, these choices of target populations seem reasonable. But these choices make the experiments less congenial to the questions of those who are interested in the ability of basic income to facilitate a reduction in paid work.

A test of a policy’s potential to foster downshifting only makes sense if experimental subjects are drawn from a population of people who have the potential to downshift, and “downshifting” typically implies a reasonably well-paying position from which one shifts down. Thus, for an experiment to address our key interests, the target population should encompass individuals who are currently employed in relatively well-paying jobs. An experiment limited to the unemployed will tell us little about a policy’s ability to promote voluntary reduction of working hours. An experiment limited to the poor will tell us little about a policy’s ability to promote voluntary reduction of earnings and consumption.

The inclusion of “successful” workers among test subject is also important with respect to the question of whether basic income would reduce the stigma associated with the receipt of public benefits or, more precisely, voluntary “benefit scrounging” (which is, in essence, just a pejorative term for what I’ve been politely describing as “using a basic income to subsidize downshifting”). Quite likely, the “scrounging stigma” is too strong to disappear during the course of a short-term experiment in any case. If a basic income were to play a role in reducing the stigma, however, it would almost certainly not be by allowing poor and unemployed individuals to live upon government subsidies while they voluntarily opt out of the search for full-time jobs. Unfortunately, such an outcome (however desirable) seems much more likely to feed existing stigmas and stereotypes than to combat them.

In contrast, basic income might have a greater and more favorable cultural impact if it subsidized downshifting among individuals in relatively well-paying jobs and promising career paths – among those, that is, who embody conventional images of success. Society accords respect and admiration to those in lucrative careers, which makes such individuals uniquely well-positioned to attract curiosity, perhaps even sympathy, if they were to spurn the life of traditional employment and choose to rely upon government monies to meet their basic expenses (which is not to say that they would not also elicit the scorn or many others). Admittedly, the idea that basic income could lessen the stigma of “benefits scrounging” is far-fetched. The point at hand, however, is simply that existing experiments are not designed in a way that can adequately illuminate how far-fetched.

 

2.5 Experimental subjects have already “come of age” in the culture of work.

Each of the existing experiments is focused on effects on adults who have already been acculturated into the dominant work ethic. It is possible, however, that some of the social and cultural effects about basic income would result from its influence on younger generations. Perhaps teenagers would internalize different attitudes toward work if they were to come of age under an unconditional guarantee of financial security – not necessarily taking for granted that a core defining features of “adulting” is to find employment at a full-time job in order to earn a living. Perhaps young adults would formulate different personal goals and ideals of success if they did not face an immediate need to earn money through a job.

In a past feature article for Basic Income News, I speculated that entering adulthood with a work-independent college stipend – which shared some commonalities to a five-year “basic income” – could have played a large role in solidifying my own rejection of the ethic of (paid) work. For example, by allowing me to continue to dedicate myself to schoolwork without worrying about paid work, it might have helped to “prevent me from unlearning” that the fact that an activity is unpaid does not imply that the activity is not worthwhile, rewarding, or hard work – or that it’s not the best use of one’s time.

To some extent, this is just to repeat the point that experiments are too limited in duration to capture multi-generational effects of a policy. In principle, though, one could design a short-term study to test the effects of a guaranteed income on a cohort of young adults at critical transitional phases, such as leaving home for college or leaving college for “the real world” (i.e., usually, either a job or the search for one). But existing experiments are not this.

 

3. Concluding Remarks

In conclusion, then, I expect the current wave of experiments to shed little light on the question of whether, or to what extent, basic income would promote a cultural shift towards a decreased valuation of paid work. Any apparent evidence that basic income would not have such an effect (e.g. a lack of observed change in workforce participation or self-reported attitudes toward work) could be explained as an artifact of the limitations of experimental design.

Arguably, however, the biggest problem with experiments is not that they most likely won’t show considerable reduction in workforce participation (and yet for reasons that are inconclusive) but that many of the policy’s own proponents don’t want them to. When committed supporters of basic income demand more experiments, as often happens these days, they aren’t doing so because they want to decide for themselves whether to endorse the policy; they already have. The hope, generally, is that experiments would produce results that allay the fears of skeptical policymakers, such as the commonplace “fear” that basic income would cause a decrease in workforce participation. As many supporters are fond of pointing out, previous experiments have not shown a marked decrease in workforce participation, or have shown a decrease only within population segments where reducing work hours is socially acceptable (e.g. school-age teenagers or mothers of young children). This attitude toward basic income experiments only recapitulates society’s overvaluation of paid work.

The policymakers who assess experiments for “failure” or “success” will do so relative to the norms and values of the status quo. Political speeches and media reports are likely to portray any observed decrease in labor force participation as evidence of the failure of the policy, as happened when a negative income tax was tested in several cities in the United States in the late 1960s and 70s. My impression, based on two years of intense work in the basic income movement, is that many supporters realize this but call for experiments nonetheless, believing that the trials will in fact yield outcomes that are “successful” relative to the norms and values of the status quo.

Hence, in addition to being unlikely to produce interesting or useful results, basic income experiments may also threaten to reinforce these norms and values in the minds of advocates and other readers. And, from the standpoint as critic of the culture of work, this is not only unhelpful but dangerous.

 


Photo: banned :: The Golden Book of Chemistry Experiments CC BY-NC 2.0

SCOTLAND: Scottish Government provides £250k to support feasibility work on BI pilots

SCOTLAND: Scottish Government provides £250k to support feasibility work on BI pilots

Angela Constance, Cabinet Secretary for Communities, Social Security and Equalities of the Scottish government announced that a fund of £250,000 is available for feasibility studies of the Basic Income pilots proposed in Scotland. In addition to the fund, the government will also help the pilot authorities to assess cost and feasibility of their plans. The grant is to “help develop a research design and undertake a limited amount of community engagement, not to fund the pilots themselves.”

The Scottish Government does not have the powers over tax and benefits necessary to pilot a full Basic Income and the proposals need to be aware of “the legislative and practical basis for implementing a pilot including the consideration of reserved and devolved powers and administrative complexities”.

The Scottish government will provide further guidance to the pilot authorities in January 2018 and a deadline for bids will be set for late March 2018.

More info:

Kate McFarland, ”SCOTLAND: Fife and Glasgow to investigate Basic Income pilots”, Basic Income News, November 29, 2016

Kate McFarland, “GLASGOW, SCOTLAND: Basic Income pilot feasibility study approved by City Council”, Basic Income News, February 21, 2017

Hamish Macdonell,  “£250,000 citizen’s income pilots a ‘shameless waste’”, The Times, November 24 2017.

 

UNITED STATES: Stockton, California plans a Basic Income Demonstration

UNITED STATES: Stockton, California plans a Basic Income Demonstration

Stockton, California and Mayor Michael Tubbs announced plans for a Basic Income trial – the Stockton Economic Empowerment Demonstration (SEED). The project is still in its initial stage, and the design phase of the project will be launched in January 2018. The design period will last 6 to 9 months, and according to a Sukhi Samra, representative of the SEED project, the design phase is being used to “solicit community input and to ensure that SEED is really reflective of the needs of the Stockton community.”

The concrete outline of the project is still in the early stages, but there are some starting points. The basic income stipend will be $500  per month and  will apply to anywhere  from 25 families for 5 years to 100 families for 1.5 years. The project has secured a $1 million grant from the Economic Security Project and a grant from the Goldhirst Foundation of $250,000 which was announced last Thursday. The project also hopes to be able to raise additional funds. According to the guidelines in the SEED website, the demonstration will gather both research and storytelling partners, and those who are interested in participating can follow the info here. The site also states the project will prioritize high quality data with the cooperation of academics and academic institutions, while also engaging in storytelling, encouraging documentary filmmakers and creative storytellers to join the team.

The city of Stockton has had a difficult past.  In 2012, it became the first city in the United States to file for bankruptcy. Since then, the city has been recovering, but it continues facing important challenges since 1 in every 4 residents still live below the poverty line. Mayor Michael Tubbs became the youngest Mayor in history, and the first African American Mayor of Stockton, in 2017. He has a progressive agenda in many areas, and the Basic Income demonstration is intended as a way to show what happens when a group of people have an income floor that is guaranteed. Stockton will be the first public/private trial in the United States with significant leadership from a public official. Mayor Tubbs is inspired by Martin Luther King Jr. who defended a guaranteed basic income.  Tubbs is interested in finding out “if a guaranteed income will unleash potential and provide the needed stability.”

 

More Info:

Stockton Economic Empowerment Demonstration Website.

Economic Security Project.

Dylan Matthews, ”Three years ago, Stockton, California, was bankrupt. Now it’s trying out a basic income”, Vox, October 18, 2017

Alexis C. Madrigal, “Free Money at the Edge of the Tech Boom”, Atlantic, October 19, 2017

Current Basic Income Experiments (and those so called): An Overview

Current Basic Income Experiments (and those so called): An Overview

Note: Please see this article for a more current update (Oct 15)

The (Second) Year of the Pilot

Status of Basic Income (and Related) Experiments in May 2017

Last Updated: May 15, 2017

 

BIEN cofounder Guy Standing, a basic income pilot veteran and now frequent consultant, dubbed 2016 “the year of the pilot in response to the burgeoning interest in experimentation with basic income in various countries throughout the world. In 2017, some of these pilot studies were launched, some have been delayed, and other plans have remained dormant. Some have turned out to resemble a full-fledged basic income to a lesser degree than first anticipated.

This page summarizes the current state of this year’s existing, planned, and previously announced basic income pilot experiments (as of May 2017).

 

A. UPDATES ON SEVEN STUDIES

Following are summaries of the present status (as of mid-May 2017) of seven pilot studies of basic income–or, better put, seven alleged or reported pilot studies of basic income–that have received international publicity within the past year, including projects in Finland, Kenya, the Netherlands, Ontario, Scotland, Uganda, and the United States.

First, though, an important caveat: although each project listed below has been described as a “basic income pilot” or “basic income experiment” in media reports, few manifest every characteristic of a basic income, defined by BIEN as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”

Granted, any social policy experiment is by its nature limited in certain ways, making it something of a vacuous criticism to say that a basic income experiment fails to test a “genuine” basic income. While a basic income is lifelong, experiments are necessarily bounded in duration. While a basic income is universal, experiments typically require that a portion of the population not receive the benefit in order to provide a control or reference group. (Even saturation studies, in which every member of a community is eligible for the program, remain limited in that the basic income does not extend to other communities in the same general geopolitical region.)

That said, some of the most highly-publicized experiments and pilot programs diverge from a basic income in ways that are significant even after accounting for inherent constraints due to the nature of experimentation. For example, the target population might not be universal. (As described below, this is the case in the experiment currently running in Finland, as well as those planned in Ontario and several Dutch municipalities and, likely, the experiment under development by Y Combinator.) Additionally, the benefits disbursed to the treatment groups in some of the experiments–such as, most notably, those planned in Ontario and the Netherlands–diverge from some of the key attributes of a basic income, such as by being household-based or reduced with earned income. (As mentioned below, the treatment conditions in the Dutch experiments will even retain a degree of job-conditionality.)

I touch upon additional caveats at the end of this article.

1. Finland’s “Perustulokokeilu” (Basic Income Experiment)

Status: Launched on January 1, 2017.

“Rainbow over the Baltic” CC BY-NC 2.0 Mariano Mantel

The national government of Finland has enacted a two-year experiment to investigate the effects of a basic income on labor market participation, designed and directed by Kela (Finland’s Social Insurance Institution). The experimental group consists of 2,000 persons, who were randomly selected from a pool of individuals between the ages of 25 and 58 who were receiving unemployment benefits from Kela in November 2016 (about 175,000 individuals nationwide). Participation in the basic income program was mandatory for those selected.

The 2,000 participants are receiving unconditional payments of €560 (about 590 USD) per month. Unlike Finland’s current programs of unemployment assistance, the pilot program imposes no requirement that recipients demonstrate that they are seeking employment or accept jobs offered to them, and those who do obtain work will continue to receive the full €560. (Thus, while the sample is clearly not representative of all Finns, the individual cash transfers do match the definition of basic income, although not a fully livable one.)

The experiment was officially launched on January 1, 2017–with the first payouts distributed on January 9–and will continue through December 31, 2018.

The research group at Kela will compare outcomes in the experimental group to a control group, consisting of all persons in the original target population who were not selected to participate. As mentioned above, the analysis will focus on labor market participation, including differences in employment rates between the treatment and control groups. Research director Olli Kangas has stated in recent lectures that Kela will also monitor expenditure on medication, health care usage, and income variation.

To avoid observer effects, Kela is conducting no interviews or questionnaires during the course of the experiment, and will publish no results prior to its conclusion at the end of 2018 (despite recent rumors driven by exaggerated claims stemming from a single anecdote voluntarily produced by one experimental participant).

Kangas has recommended expansion of the experiment in future years (e.g. to test different models and broaden the target population); at the time of this writing, however, the government has not acted upon this recommendation.

Official website: https://www.kela.fi/web/en/basic-income-experiment-2017-2018.

2. GiveDirectly’s Kenyan Basic Income Experiment

Status: Pilot launched in one village in October 2016; full experiment (200 villages) intended to launch in fall 2017.

GiveDirectly, a US-based charitable organization, has initiated a project in which it will eventually provide unconditional cash transfers to the residents of 200 villages in rural Kenya (about 26,000 people in total).

An initial pilot study commenced in one village in October 2016, in which all 95 residents now receive monthly unconditional cash payments of about 23 USD (€21) per month, amounting to roughly half of the average income in rural Kenya. Payments will continue in this village for 12 years. At the time of this writing, only this initial “test village” is receiving a basic income. GiveDirectly’s current objective is to launch its full experiment in September 2017.

Rural Kenya, CC BY-NC 2.0 ViktorDobai

In the full study, 300 villages will be randomly assigned to one of four groups: three treatment groups, in which all residents receive some form of unconditional cash transfer, and a control group of villages in which no cash transfers are given to any residents.

In the first treatment group, which will include 40 villages, residents will receive cash payments of about 23 USD every month for 12 years (as in the initial test village). In the second, containing 80 villages, residents will receive monthly cash payments of the same amount, but only for two years. In the third, also containing 80 villages, residents will receive a lump-sum payment equal in amount to the two-year basic income. (Note that, ignoring their time-boundedness, the schemes implemented in the first two treatment groups do meet BIEN’s definition of ‘basic income’.)

As GiveDirectly explains on its website, “Comparing the first and second groups of villages will shed light on how important the guarantee of future transfers is for outcomes today (e.g. taking a risk like starting a business). The comparison between the second and third groups will let us understand how breaking up a given amount of money affects its impact.”

The organization also indicates that it will investigate outcomes including “economic status (income, assets, standard of living), time use (work, education, leisure, community involvement), risk-taking (migrating, starting businesses), gender relations (especially female empowerment), [and] aspirations and outlook on life.”

GiveDirectly is making much of its data public as it collects it (e.g. responses to the first survey of participants in its initial pilot); this practice, however, pertains only to the pilot village, which is not itself to be included in the full experiment. The organization expects to publish its first experimental results after one or two years.

Official website: www.givedirectly.org/basic-income.

3. Ontario’s Guaranteed Minimum Income (“Basic Income”) Pilot

Status: Pilot studies scheduled to commence in two regions in spring 2017, and in a third region in autumn 2017.

Lindsay, Ontario, CC BY 2.0 RichardBH

The government of the Canadian province of Ontario is preparing a three-year pilot study of a guaranteed minimum income (commonly called in a ‘basic income’ in Canada), which will take place in three locations: the Hamilton, Brantford, and Brant County region (launching in late spring 2017); Thunder Bay and surrounding area (launching in late spring 2017); and the city of Lindsay (launching in autumn 2017).

A total of 4,000 potential participants will be randomly selected from a pool of low-income adults between the ages of 18 and 64 years who have lived in one of the three test locations for at least one year. Participation is voluntary, and those who do agree to participate in the experiment may exit at any time during the study.

Study participants will receive a minimum annual income of 16,989 CAD (€11,340) for single individuals and 24,027 CAD (€16,038) per year for couples. That is, individuals and couples with no external income would receive this amount of money. For participants who to earn additional income, the amount of the benefit will be reduced by the amount of 50% of earned income (entailing that, for example, single individuals will stop receiving any payment if their income rises above 48,054 CAD per year). Individuals with disabilities will receive an additional amount of up to 500 CAD (€334) per month.

The benefit is not contingent on work or looking for work. However, because the amount of the benefit depends on income and household composition, and because eligibility for the study is limited to low-income individuals, the program to be tested in Ontario is not a basic income in BIEN’s sense. (As mentioned above, the term ‘basic income’ is often used in Canada to refer to guaranteed minimum income programs, in contrast to the definition adopted by BIEN and common in Europe. The Ontario government is not being sloppy or dishonest in titling the program ‘Basic Income Pilot’; mere dialectical differences explain the ambiguity.)

According to the Government of Ontario website, the experiment will measure outcomes in a variety of areas, including food security, stress and anxiety, mental health, health and healthcare usage, housing stability, education and training, and employment and labor market participation. A third-party research group will evaluate data collected during the pilot.

Results of the pilot will be reported to the public in 2020.

Official site for more information: www.ontario.ca/page/ontario-basic-income-pilot.

4. Municipal Social Assistance Experiments in the Netherlands

Status (July 2017): Six municipalities approved to proceed with two-year experiments, which will begin in Sep-Oct 2017; applications from Utrecht and Amsterdam currently under review.

In 2016, research teams in several municipalities in the Netherlands developed plans to experiment with unconditional cash transfers to replace the nation’s workfare-oriented program of social assistance. However, their plans encountered resistance from the national government, which imposes constraints upon–and, in effect, prohibits–experimentation with unconditional benefits. (For example, the Dutch Participation Act would require that experimental participants be surveyed after six and twelve months to verify that they have made sufficient efforts to find work, and dropped from the study if they have not–effectively removing the “unconditionality” of the benefit.)

A pilot proposed in Utrecht, which had gained the lion’s share of attention in the English-language news media, has been delayed after the government failed to authorize the experiment as designed by the Utrecht University research team.  

Groningen, CC BY-NC-ND 2.0 Emmanuel Fromm

On July 3, 2017, the Dutch Ministry of Social Affairs authorized experiments in the first five municipalities: Groningen, Wageningen, Tilburg, Deventer, and Ten Boer (read more). Groningen and Ten Boer will be working in collaboration.  

A similarly structured experiment in Nijmegen, which is to involve 400 participants, was also approved later in the month.

In contrast the previously rejected design of an experiment for in Utrecht, the designs of the latter experiments were deemed to be in compliance with the requirements of the Participant Act. For example, each includes a treatment group in which participants are subject to workforce-reintegration requirements that are more intensive than current welfare programs.

In each of the experiments, which will run for two years, participants will be randomly selected from a pool of current social assistance beneficiaries (with participation voluntary for those selected), and assigned either to a control group or to one of several treatment groups.

Each experiment has at least three treatment groups, testing the following types of interventions: (1) removing reintegration requirements (e.g. job applications and training programs) on welfare benefits; (2) providing a more intensive form of reintegration service; (3) permitting participants to earn additional income on top of their welfare benefits. Subjects assigned to the third treatment groups will be permitted to retain 50% of additional earned income, up to a maximum of €199 per month, for the duration of the two-year experiment. In contrast, under current policy, welfare recipients are permitted to keep only 25% of additional income, and only for up to six months.

The Groningen / Ten Boer experiment includes a fourth treatment group, in which participants are permitted to choose to join any one of the three preceding groups.

It is not fully accurate to refer to the Dutch municipal experiments as tests of basic income. None includes an experimental condition in which the amount of the benefit is fully independent of either income or household composition (the existing benefits are household-based, which is not to be altered in any of the proposed experiments). Further, none of the proposed experiments includes a treatment that combines a reduction in the withdrawal rate of benefits with a removal of work-related conditions. And, as mentioned above, even those subjects who receive the “unconditional” payments will be subject to removal from the study after six or twelve months if they fail to seek work.

Researchers plan to examine outcomes such as employment (including part-time and temporary employment), education, and health and well being.

5. Eight’s Unconditional Cash Transfer Project in Uganda

Status: Launched on January 1, 2017.

In January 2017, Eight, a charitable organization based in Belgium, began disbursing unconditional cash payments in the Ugandan village of Busibi. All residents of the village, including 56 adults and 88 children, receive monthly cash payments, distributed via mobile phones. Each adult receives 18.25 USD (about €16.70) per month, approximately 30% of the average income of lower-income families in Uganda, and each child receives half of this amount, or 9.13 USD per month. The payments will continue through the end of 2018.

Used by permission of Steven Janssens

Eight is working with anthropologists at Belgium’s University of Ghent to examine outcomes along four main dimensions: girls’ educational achievement, access to health care, entrepreneurship and economic development, and participation in democratic institutions. Researchers will compare data collected during and after the pilot to data that were gathered before its launch. However, no additional village is being studied as a control, limiting the project’s usefulness as an experiment.

That said, Eight’s project has objectives beyond research. It is also the basis of a documentary, the first segments of which have already been release, and cofounder Steven Janssens has emphasized its larger purpose to inform future basic income projects: “From our experiences with this pilot we will learn and adjust where necessary, because in the long term we want to scale-up to more villages as our organization grows.”

Official site for more information: eight.world.

6. Y Combinator’s US-Based Unconditional Cash Transfer Study

Status: Design phase; no known launch date.

Sam Altman, CC BY 2.0 TechCrunch

In early 2016, Silicon Valley tech entrepreneur Sam Altman decided to pursue a privately-funded basic income experiment, motivated in part by the goal of moving away from a focus on employment effects and examining potential benefits of a basic income more holistically. To this end, he founded a research group at his company Y Combinator to design and implement the project.

In a February 2017 talk at Stanford, research director Elizabeth Rhodes explained that Y Combinator’s pilot is still in the design phase. As currently planned, it will use a stratified sample of 2,000 to 3,000 individuals from two states, between the ages of 21 and 35, with household incomes below the median in their area. At least 1,000 of these study participants will be randomly assigned to the treatment group, in which they will receive 1000 USD (about €915) per month for three years (with a subset receiving the payments for an additional two years). The payments will be given unconditionally and irrespective of income. The remainder of the sample will provide a control group.

The research group is also still in the process of developing metrics to evaluate the experimental results. However, Rhodes has indicated that experimenters are interested in a holistic evaluation of individual-level outcomes such as labor market participation, training and education, time spent with children, physical and psychological health and well-being, risk-taking, financial health, and help given to friends and family. Outcomes related to the children of participants (e.g. grades and test scores) might also be examined.  

Y Combinator’s “pre-pilot” in Oakland, announced in May 2016 to media acclaim, is not itself an experiment; its purpose is merely to help the research team fine-tune its methods and procedures (selection of subjects, disbursement of payments, collection and recording of data, etc.).

7. Scottish Municipal Experiments

Status: Feasibility studies in progress.

Glasgow Bridge, CC BY-NC-ND 2.0 Colin Campbell

In Glasgow, Scotland, the City Council has partnered with the think tank Royal Society of Arts (RSA) to investigate designs for a basic income pilot. The planning process, while moving forward, is at an early stage in development, with the Council and RSA currently working on a study of the financial, administrative, and constitutional feasibility of the pilot. Workshops on these topics will be held in June and July 2017, and a report is planned for September.  

The Councils of Fife and North Ayrshire have also committed to investigate the possibility of conducting basic income experiments.


B. OMISSIONS AND FURTHER CAVEATS

Avid followers of basic income news (including Basic Income News) might have noticed that some previously announced pilots and experiments have been omitted from the above list.

Oversight, of course, is a possible cause: if a current or planned basic income experiment is missing from this page, please submit it to our Submit a News Lead form.  

In some cases, though, apparently omissions may be intentional. Sometimes “basic income experiments” are announced in the media (1) prematurely, (2) when the experiment is not actually testing a basic income, or (3) when the project is not an experiment:

 

1. Not all previously announced pilot studies have come to fruition. For example, contrary to claims promulgated in news media and social media in recent months, neither the Office of Financial Empowerment of San Francisco, California nor the provincial government of Prince Edward Island, Canada is pursuing a pilot study of basic income at this time (primarily due, in both cases, to failures in attempts to secure funding for the experiments).

India has also occasionally been cited as a location about to launch a new basic income pilot study–or even about to implement a full-blown basic income policy (see the response in Basic Income News to rumors that circulated at the start of the 2017). To be sure, the national government of India has shown considerable interest in universal basic income, devoting an entire chapter to the topic in the 2017 Economic Survey, an annual document prepared by the Ministry of Finance. India is also notable in the basic income community for the success of previous basic income pilot studies. At the time of this writing, however, no firm plans for additional pilot studies (let alone a full-blown policy) have been announced, and any popular media reports of new pilot studies in India remain speculative and premature.

In general, one should be wary when the popular media announce the impending launch of a basic income experiment. Such announcements often frame the prospective studies as far more certain–and farther along in the planning process–than they actual are. Researchers and governmental officials might indicate interest in running an experiment prior to attempting to obtain funds or examining the legality or feasibility of the project, and sometimes such expressions of interest capture the ears of the media. Of course, such tentative interest does not entail that an experiment will ever actually manifest.

 

2. I have raised the second issue–the fact that many so-called “basic income pilots” or “basic income experiments” diverge substantially from tests of a genuine basic income–at the start of this article, and we have already seen examples above (including the Dutch social assistance experiments and the Ontario pilot).

Due to their relative lack of attention in popular media, I have not included reference to other social assistance experiments that have, on occasion, been inaccurately called “basic income experiments” — including those in Barcelona and the Italian town of Livorno. About the latter, a six-month social assistance experiment, BIEN-Italia’s Sandro Gobetti has clarified in Basic Income News, “Among the requirements [for participation in the experiment] was residency in the municipality for at least five years, unemployment status, registration at the employment center and a family income not exceeding €6530 gross per year. In exchange for €500 monthly, the municipality invited successful applicants to perform socially useful work.”

 

3. Finally, note that several non-profit organizations have launched projects that involve the distribution of unconditional cash transfers to individuals, but that are not experiments (although, in some cases, they might still be called “pilots”).

For example, Brazil’s ReCivitas raises money to distribute unconditional cash payments of 40 Brazilian Reais (about €12 or 10 USD) per month to residents of the village of Quatinga Velho, Brazil. In January 2016, the organization announced that the monthly payments would be lifelong, and began distributing the payments to an initial group of 14 individuals. However, the ReCivitas Institute is not gathering data to study the effects of basic income. Project leaders have stated that they are already convinced that basic income is effective, and that their goal is to provide a model and inspiration to other similar initiatives. The initiative might be considered a pilot, insofar as it is intended to provide information about how NGOs have effectively implement a basic income scheme; however, it is not an experiment.     

Lottery programs that award selected individuals their own “basic income” for some length of time, such as Germany’s Mein Grundeinkommen, are also not experiments and should not be classified as such.

Most recently, a newly launched film project in the United States, Bootstraps, has begun raising money for what it calls a “basic income pilot program”. This effort also appears not to be an experiment but, instead, a similar lottery-style program, intended to generate anecdotes, publicity, and awareness of the idea of basic income rather than robustly test its effects.


Reviewed by Tyler Prochazka. Some additional proofreading by Karl Widerquist, May 25, 2017

Cover Image: CC BY-ND 2.0 iT@c

ITALY: Basic Income Pilot Launched in Italian Coastal City

ITALY: Basic Income Pilot Launched in Italian Coastal City

Filippo Nogarin, the mayor of the Italian coastal city of Livorno who launched an initiative to provide a guaranteed basic income to the city’s 100 poorest families in June 2016, is poised to extend the program in the beginning of 2017. A member of the anti-establishment Five Star Movement (M5S), Nogarin was elected in 2014.

Nogarin’s first basic income pilot, which began in June 2016 and lasted six months, provided each of the 100 families with $537 (roughly €517) per month. In January 2017, this pilot will be expanded to another 100 families. While the intervention is designed to provide meaningful support to each family, it will reach only a fraction of Livorno’s population: the coastal city boasts over 150,000 residents.

Nogarin, like many proponents of basic income policies, sees the initiative as a fundamental way to help those in poverty without the patriarchal overtones of traditional welfare programs. “I’ve never met the recipients, and this is a hugely important point,” he said, “I don’t want them to see me as a patriarchal figure handing out charity. This is the real power of this scheme: it’s the community helping the community.”

However, critics in Livorno, such as local trade union activists, are wary of the scheme: some believe the initiative to be misguided, while others see it as misleading. Though basic income provides cash support for the targeted families, it does not offer employment. Furthermore, the initiative’s focus on a small subset of the Livorno population has been criticized as too narrow for an anti-poverty program.

Other Italian municipalities led by M5S may follow Livorno’s lead in testing a cash transfer program. Ragusa and Naples are now considering basic income trials as well, and interest in such programs has spiked.

At the national level, M5S has proposed what it calls a “citizen’s income,” though some have pointed out that this terminology could be construed as deceptive, since the party’s proposal resembles a traditional unemployment benefit more than a basic income guarantee.

 

More information at:

Jamie Mackay, “Money for Nothing,” VICE News, December 6, 2016.

Sabrina Del Pico, “Italy: 5 Star Movement and the confusing proposal of a citizen’s income,” Basic Income News, March 14, 2013.