Universal basic income improves well-being and encourages work, study finds

Those paid the income did better on jobs and mental health than control group in two-year study

Recipients were paid an unconditional income (Getty Images/iStockphoto)

Paying people a universal basic income improves their mental well-being and has a small but positive effect on whether they take up jobs, a two-year pilot study has found.

Scotland’s first minister Nicola Sturgeon this week suggested the policy’s time had come, with new polling suggesting that post-coronavirus now enjoys the support of 71 per cent of Europeans, and growing support in parliament.

The pilot, commissioned by the Finnish government, has been watched keenly around the world and comes amid increased interest in the policy as a way of supporting people during the coronavirus pandemic and beyond.

The study, the most comprehensive carried out yet, saw 2,000 people chosen at random from among the unemployed paid a regular monthly income of 560 euros (£490) by the state for two years with no strings attached and no reduction in payments if they found work – in contrast to traditional unemployment benefits.

“Survey respondents who received a basic income described their wellbeing more positively than respondents in the control group,” the study’s authors at the Social Insurance Institution of Finland said.

“They were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory, learning and ability to concentrate.”

The basic income also appears to have moderate effect on encouraging people to find jobs – an effect some had theorised would occur because recipients do not lose their support when they take one up.

The study found that people paid the income were in employment on average six days more than people in a control group where people were not payed the income.

“The employment rate for basic income recipients improved slightly more during this period than for the control group,” the study said.

The latter finding is in contrast to arguments by opponents of the policy, such as former DWP secretary Iain Duncan Smith, who suggested the policy would be a “disincentive” to work because it did not include sanctions.

Many developed western countries like the UK and US have in recent decades adjusted their welfare states to be more punitive, attaching strings and conditions to benefit payments with the stated aim of encouraging people back to work.

Polling conducted by the European Studies Centre, at St Antony’s College, University of Oxford, asked more than 12,000 people their view on the policy between 5 March and 25 March.

The researchers found 71 per cent supported its introduction. Respondents were from the 27 EU member states and the UK.

“For an idea that has often been dismissed as wildly unrealistic and utopian, this is a remarkable figure,” said authors Timothy Garton Ash and Antonia Zimmermann in an article on the findings. They found that support was equally strong across age groups.

Speaking in Edinburgh earlier this week the Scottish first minister Nicola Sturgeon said: “The experience of the virus and the economic consequences of that have actually made me much, much more strongly of the view that it is an idea that’s time has come.”

The position is also backed by many MPs and peers, over 170 of whom signed a letter published by The Independent in early March calling for the policy in response to the coronavirus crisis.

Labour took some steps towards engaging with the policy under its previous shadow chancellor John McDonnell, who promised pilot studies if elected. New leader Keir Starmer has however moved away from backing the policy. It has long been supported by the Green party.

Dominic Raab, the foreign secretary, rejected the policy last month, telling MPs: “I think we need to have a very focused approach providing the resources that we need to those that need it most.