A German experiment in which employees were given an extra tax-free €1,200 a month with no strings attached found that the cash made them happier and better rested without having any significant impact on their work ethic.
In recent years figures as diverse as Jeremy Corbyn, Elon Musk and the Pope have made the case for a “universal basic income”, broadly along the lines sketched out by the Tudor statesman Thomas More in his Utopia more than 500 years ago.
The idea is that guaranteed and unconditional handouts provide citizens with a solid safety net and a certain measure of inalienable financial independence, particularly in an age when many jobs are considered vulnerable to automation.
Critics have long maintained that the schemes are not only unaffordable but also a strong disincentive to work.
So far there have been about 160 field trials of basic income projects, mostly in the United States, with various designs and mixed results.
No state has yet implemented a full universal basic income, but there have been gestures along similar lines in the past.
Some enthusiasts for the idea suggest there are precedents in the “grain dole”, introduced in the ancient Roman republic to mitigate the impact of slavery on the domestic labour market, or Julius Caesar’s periodic distributions of wealth among the citizens of Rome.
One of the best-known experiments in modern Europe involved 2,000 unemployed Finns who were randomly selected to receive €560 a month in 2017 and 2018. On average, their life satisfaction and mental health improved and they showed slightly more willingness to take low-paying jobs.
The German pilot study, run by the Berlin-based Mein Grundeinkommen (My Basic Income) initiative, targeted a different part of society.
The organisation raises about €800,000 a month in crowdfunding from more than 200,000 regular donors and distributes it to 430 recipients. In the experiment it picked 122 of these participants, all of whom were previously earning between €1,100 and €2,600, between the ages of 21 and 40 and living in single-person households.
They each received €1,200 a month for three years, in most cases paying no tax on the extra income because it was classified as a gift. There was also a control group of 1,580 people who came from the same demographics but got no additional money.
The effects were monitored by economists from some of Europe’s leading research institutes, including the universities of Oxford, Vienna and Cologne.
The study found that the basic income made no discernible difference to how much time the recipients spent working, which remained at an average of 40 hours a week.
“I work just as much as I did before,” said Samira Korves, a swimming teacher from the west German city of Münster who was assigned to the basic income group. “I think it’s simply because work is important for me. I can’t sit around and do nothing.”
The recipients were also more likely to change jobs, possibly because they felt they had the financial freedom to try new things.
Sergej Justus, an online retail administrator from the central German town of Linden, said he had been able to start retraining as a yoga instructor. He said: “This basic income was pretty decisive. That’s a fact.”
Many of those in the basic income group also reported higher levels of satisfaction with their health, a stronger sense of financial security, better sleep and lower levels of stress. By the end of the study their average life satisfaction score was about 7.3, compared with 7.1 for the control group.
Susann Fiedler, a psychology professor at the University of Vienna and one of the lead researchers, said the methodology of the randomised control trial had made it possible to determine a causal effect from the cash handouts despite the economic and social turbulence in Germany over recent years.
However, some of her colleagues said that the study had limitations, such as a reliance on self-reported working hours and a relatively small number of participants.
