Basic income pilots

Beginning in the end of 1960s, there were four basic income experiments conducted in the United States, all in the form of a negative income tax. As Alicia H. Munnell, who was examining the experiments in Indiana, Seattle and Denver explains,[1] a moderate reduction in work effort (17% among women, 7% among men) has been found by the American economist Gary Burtless. Munnell also mentions that the money people had received was not squandered on frivolous products such as drugs and luxury goods. In addition, there has been an increase in school attendance. Nevertheless, no noticeable improvements to health and the overall well-being were discovered and the effect on home-ownership rates was found to be negligible as well.

A similar field experiment of the Canadian Guaranteed Annual Income (GAI), known as Mincome, took place in Dauphin, Manitoba between 1974 and 1979. According to a research into the effects of Mincome on population health, conducted by a University of Manitoba researcher Evelyn Forget in 2011, the experiment has resulted in significant reduction in hospitalization, specifically in case of mental health diagnoses.[2] Among all the people, only two key groups were found to be discouraged from working by the Mincome project – new mothers and teenaged boys, who, instead of entering the workforce at an early age, decided to study until grade 12, increasing the proportion of students who graduate high school.[3]

A longitudinal study of 1,420 low income children in rural North Carolina designed to observe their mental condition had the unintended result of also measuring the effect of an unconditional cash transfer on a subset of this group.[4] The Great Smoky Mountains Study of Youth has found that a quarter of the families belonging to the Eastern Band of Cherokee Indians have experienced a surge in annual income due to a newly built casino as during this study, a portion of profits of this casino were unconditionally distributed to all tribal members on a semi-annual basis.[5] Key findings of this study include lower instances of behavioural and emotional disorders among the children and improved relationship between children and their parents, as well as reduction in parental alcohol consumption.[4]

In May 2016, Y Combinator, an American company with the aim of providing seed funding for start-up companies, announced that its non-profit arm YC Research would perform a five-year unconditional basic income study, which resembles the experiments carried out in the 1960s and 1970s, in Oakland, California.[6]

The project was delayed by institutional review board approval at Stanford University and the University of Michigan, and work with governments to ensure recipients would not lose benefits they were already receiving.[7] The project gave six people from Oakland $1500 per month in an initial feasibility study. Instead of the previous plan of giving 100 families $1,500 per month, by mid-2018 YC Research was hoping to get 30 to 40 people from Oakland to participate in a $50 per month trial to refine the logistics of distribution and retention of the $50 per month control group.[7] It was planning to run three- and five-year trials in two states, not including Oakland, involving 1,000 participants randomly assigned to $1,500 per month and 2,000 randomly assigned to the $50 per month control group.[7] The full study is expected to cost $60 million, and YC Research is waiting for fundraising to complete before starting the study.[7]

In Ontario, three-year basic income projects were launched in three regions from late spring to fall 2017. The participants of the project were randomly selected among resident of the regions aged 18–64, who were living on low income.[8] The purpose of the experiment was to tackle poverty, providing people with income security while, at the same time, not discouraging them from entering the labour force. Furthermore, as poverty is believed to be one of the biggest determinants of health, the project is believed to improve health condition, which could, in turn, reduce health-care costs for the government.[3] The pilot project was cancelled on July 31, 2018 by the newly elected Progressive Conservative government under Ontario Premier Doug Ford, with his Minister of Children, Community and Social Services Lisa MacLeod stating simply it was 'unsustainable' without citing data.[9]

Payments to participants continued until March 2019.[10]

In a pilot project in Stockton, California which began in February 2019, 125 residents of Stockton, California who were living at or below the median income line (around $46,000 annually) were given $500 monthly stipends, distributed through the mail in the form of debit cards, for eight months. Results evaluated in October found that most participants had been using their stipends to buy groceries and pay their bills. Around 43% of participants had a full or part-time job, only 2% were unemployed and not actively seeking work.[11]

In 2008, the Namibian Basic Income Grant Coalition conducted a two-year basic income pilot in the Otjivero - Omitara settlement, providing $100 per month to every person under the age of 60. The treatment group consisted of around 1,000 people, and a combination of panel and case studies was used to measure outcomes. After the study ended at the end of 2009, a monthly allowance of $80 was paid to all participants until March 2012.[12]

In 2013, due to extreme drought conditions, the Evangelical Lutheran church in Namibia provided a monthly cash grant of $100 to 6,000 individuals in four communities, modeled after the initial pilot program, from September 2013 to May 2014. In June 2014, the program restarted thanks to support from the Waldensian Church in Italy, lasting until June 2015.[13][14]

A program in Uganda randomly awarded an unsupervised grants of $382 to 535 young applicants aged 15–35. The results showed that "the program increases business assets by 57%, work hours by 17%, and earnings by 38%". In addition, many of those who participated in the project have also started their own enterprises, creating job opportunities for others.[15] In January 2017, another pilot study, designed for two years, was launched by the charitable organization Eight in an undisclosed village consisting of 50 households. The experiment, which is being recorded in a documentary, aims to evaluate the effects of basic income in four areas: education participation of girls and women, access to healthcare, engagement in democratic institutions and local economic development. The amount of income distributed to the village residents per month is $18.25 for adults and $9.13 for children.[16]

GiveDirectly, one of the highest ranking charities according to GiveWell,[17] has been researching the effects of unconditional cash transfers with randomized controlled trials in both Kenya and Uganda since 2008. In 2013, a paper outlining the results of a two-year study on basic income in Kenya was published, examining a wide variety of outcomes.[18] At the moment, two studies with separate research groups, composed of professors at various research universities in the United States, are being conducted.[19] While the first group is measuring impacts of cash transfers on macroeconomic activity,[20] the other is looking at the impact of different cash transfer designs.[21] In 2016, GiveDirectly announced a launch of a 10-year, $30 million pilot on universal basic income in Kenya.[22]

The basic income project in Madhya Pradesh, India, which started in 2010, involves 20 villages.[23] While the villagers in eight of those got basic income, the others serve as control groups. According to the first communication of the pilot projects, positive results were found.[24] Villages spent more on food and healthcare, children's school performance improved in 68% of families, time spent in school as well as personal savings nearly tripled and new business start-ups doubled.[25] The study has also found an increase both in economic activity and in savings, an improvement in housing and sanitation, improved nutrition, less food poverty, improved health and schooling, greater inclusion of the disabled in society and a lack of frivolous spending.[26]

Bolsa Familia is a Brazilian federal anti-poverty program with strong resemblance of basic income. It consists of a cash grant, which is given to families below a certain income level, provided they meet pre-arranged conditions such as overseeing their children's school attendance. Other similar programs are implemented in several Latin American countries, including the Oportunidades programme in Mexico.

Quatinga Velho is a Brazilian village in the Quatinga district of the Mogi das Cruzes municipality, which is becoming well-known for its basic income project launched in 2008 and organized by the non-profit organization ReCivitas.[27][28] The funding has been entirely based on private donations so far.[29] In June 2011, 83 villagers were given 30 Brazilian reals per person each month.[30] The organization's objective is to eventually grant the basic income to all villagers and to get similar projects going in other villages as well, both in and outside Brazil. The organizers are currently building a social bank, so that the basic income can be financed through investments rather than donations in the future. The idea is that the bank will operate as an investment bank, but the profit will be allocated to basic income instead of a dividend to shareholders and managers.[31]

Experiments with basic income in the Netherlands are experiments with social assistance (more than basic income) as they focus on current welfare claimants.[32] The most important experiment is called 'Weten wat werkt' (Knowing What Works) and is a cooperation between Utrecht University and the City of Utrecht, studying "alternative approach to deliver social assistance".[33] During the experiment, social assistance claimants are randomly divided into four groups, each of which will receive payments under different conditions. The aim of the study is to investigate the effects of different or fewer rules on claimants of social assistance. The experiment was supposed to be launched on 1 May 2017, but approval by the Dutch Ministry of Social Affairs and Employment was delayed.[34] The experiment started in June 2018 and will conclude in October 2019. [35]

A nationwide, two-year pilot scheme was launched in Finland on 1 January 2017. In total, 2,000 participants, who were randomly selected among those receiving unemployment benefits and aged 25–58, were entitled to an unconditional income of €560 per month, even if they found work during the two year period.[36] The experiment tests whether the implementation of basic universal income could help provide welfare more in line with the changing nature of work, reduce the cost and complexity of the benefits system and provide citizens with greater incentive to find work. Addressing issues caused by automation, long-term unemployment and lower wages are part of a larger social context for the experiment. [37] [36]

As planned, the experiment ended at the end of 2018, and the government of Finland has decided not to continue the experiment while the results of the study are analyzed.[38] Preliminary results were released in 2019. While levels of employment did not change, it did report that those involved showed "fewer stress symptoms, fewer difficulties concentrating and fewer health problems than the control group. They were also more confident in their future and in their ability to influence societal issues."[39][40] The full results of the study will come in 2020, after researchers have had time to analyse all the collected data.[41]

In June 2016, the mayor of an Italian coastal city of Livorno Filippo Nogarin launched a conditional minimum income project for a period of six months, granting 100 of the poorest families in the city a monthly sum of $537 to cover their basic costs such as rent and food. The project is not an unconditional basic income.[42] In January 2017, the scope of the project was extended to include another 100 families. Even though the granted sum is not as high as in case of Finland or other countries, it constitutes a huge relief for the families which are otherwise not protected at all due to the lack of unemployment benefits and minimum wage laws in Italy. The project has already inspired other Italian cities, such as Ragusa and Naples, to consider launching similar schemes as well.[43] In Italy, other projects of minimum guaranteed income had already been realized, much more advanced both for the amount of money and for the purposes of the Livorno project. One of these had been implemented in the Lazio Region thanks to the introduction of a law (4/2009) which in 2010 envisaged about 600 euros per month for the unemployed, particularly for women. About 10,000 people had participated in this first phase of starting the law for the minimum guaranteed income. The subsequent regional government has not funded the law again.[44]

In 2018, the Scottish Government agreed to provide 250,000 GBP to assess the feasibility of a basic income pilot in four areas: Glasgow, Edinburgh and the regions of Fife and North Ayrshire. The feasibility study will be completed in September 2019, and the government will then decide how best to proceed with a pilot in the four areas.[45] [46] The Royal Society for the Encouragement of Arts, Manufactures and Commerce has also produced a report examining some of the benefits and challenges of a basic income system in the region of Fife.[47]

In France, 13 local departments[48] have expressed the wish to experiment basic income in their territories. However such experiments would require the approval of the French government.