1200 euros basic income: what to expect from the new experiment

A scientific experiment on unconditional basic income is starting in Germany. How does the project differ from previous ones – and what insights can it bring?

The concept of an unconditional basic income is hotly debated. Proponents praise it as a humane alternative to Hartz IV that makes us all freer and happier. Critics see it as an invaluable social utopia for idlers. An attempt is now being made in Germany to put the discussion between these two ideological poles on an objective basis.

The non-profit association “Mein Grundeinkommen” is starting a pilot project together with the German Institute for Economic Research (DIW) and scientists from the Max Planck Institute and the University of Cologne, which aims to investigate the specific effects of such a basic income. It is not the first basic income experiment – but a special one. Because it is the first long-term scientific study of this kind for Germany . How the field test works and what findings it can bring:

How is the experiment set up?

Starting in spring 2021, 120 participants should receive a monthly basic income of 1200 euros – regardless of what else they earn or own. The money is paid out for three years. At the same time, a control group of 1,380 people is formed who do not receive the money, but who are examined in the same way as those receiving basic income. In this way it can be determined which changes are really due to the basic income.

The test participants of both groups will be selected from all persons who apply to participate on the project website . In order to keep the sample as representative as possible, the researchers hope to have one million applicants by November. The project is financed by donations.

What exactly is being investigated?

Participants in the study are regularly interviewed to find out how the basic income is changing their lives. It’s about the professional situation, but also questions of general satisfaction and health aspects. For example: do people work more, less or differently? To what extent do existential fears, stress and the risk of burnout decrease? What do people do with the additional financial security and what does it do with them? Some participants even want to evaluate hair samples.

How does the project differ from other basic income experiments?

The idea of ​​an unconditional basic income has been and is being tried out in various countries. In a long-term experiment in Kenya, for example, thousands of people have been receiving a basic income equivalent to 20 euros a month for several years. However, the findings are often difficult to transfer. “Previous global experiments are largely useless for the current debate in Germany,” says DIW researcher Jürgen Schupp who was involved in the study .

The closest thing to us was another highly regarded experiment in Finland . The Finnish government paid an unconditional basic income of 560 euros per month for two years. The 2000 participants were all unemployed, however, as the Finns were primarily interested in the effects of the labor market. As these were not satisfactory, the project was discontinued. Participants from as many social classes as possible should now take part in the German experiment.

The topic is not entirely new in this country either. The Berlin association Mein Grundeinkommen, which has now initiated the pilot project, has been raffling off donation-financed basic incomes of 1,000 euros per month for a year for several years. ( Here winners report on their experiences. ) However, this experiment is not scientifically accompanied, so that no reliable statements can be made.

What findings can be expected?

In the Finnish experiment, the labor market effects were small, but the researchers found a number of other positive effects. The recipients of the basic income were “more satisfied with their lives and suffered less from psychological stress,  depression , sadness and loneliness,” as the final report states. They also had more confidence in their fellow human beings and social institutions.

Many winners of the Mein Grundeinkommen lottery in Germany also report increased life satisfaction due to the additional security. In a non-representative survey of these winners, a majority said they were more courageous and curious. Most of them felt less pressure to perform, but more drive.

In the upcoming experiment, DIW researcher Schupp expects that some “who work solely for the money” will actually give up their jobs, he told the “Spiegel” . But he also knows from social science surveys that many would not turn their lives upside down if they received an unexpected cash gift of 10,000 euros. “Around half answered that they would not change anything and would not touch the money at all, but would put it in their reserves. I would not be surprised if a similarly high proportion of our basic income recipients would keep it that way.”

What are the limits of the study?

The study can provide interesting insights into what is changing for the individual. However, it cannot capture the overall social impact of an unconditional basic income – for example on prices, wages and taxes. Because if the basic income were to be introduced for everyone, most of the other social benefits would probably also have to cease to be able to finance it.

Therefore, two follow-up studies are already being planned: one deals with a cheaper basic income light, the other with a concept for financing. From 2022, it will be investigated how strong the positive effects from study 1 are if people do not receive an additional 1200 euros, but their salary is only increased up to this amount (1200 euros minimum income instead of basic income on top).

Finally, the third part of the study aims to examine what happens when the basic income is offset against all other income with a simulated tax of 50 percent. “At the end of the three studies, statements can be made as to whether the basic income has an effect and whether this effect arises from the additional money or from increased psychological security,” says the written project presentation .

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