New Study Raises Concerns Over Universal Basic Income Plans

In my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, I explore how the American republic can survive in the 21st Century given unprecedented economic, technological, and political changes. The book addresses the increasing calls for a universal basic income (UBI). Various Democratic cities are already implementing UBI systems. Now, a new study finds (as did some prior studies) that UBI systems have not achieved significant improvements and may actually have some negative consequences for recipients.

A working paper with the National Bureau of Economic Research shows that UBI recipients did indeed spend more money, including a 13 percent increase on child-related expenses. There was also a slight increase in parental supervision of children.

However, there was no improved school performance and a slight increase in reported developmental and stress-related problems with children.

Stanford’s Basic Income Lab is tracking more than 160 UBI projects in the U.S..

So far, the results are at best mixed. One study in Compton showed that many recipients of the $500 monthly payment quit working part-time jobs.

Likewise, reports indicate that “a $400 monthly payment in Chelsea, Massachusetts, increased food spending and did not measurably reduce work, but it failed to produce results for the research team’s “primary downstream outcomes”—namely self-reported health and child school attendance.”

This follows earlier reports about the OpenResearch Unconditional Income Study (ORUS), an experiment in which lower-income Americans were given $1,000 a month for three years. The result was a reduction in work and an increase in leisure activities. There was also an increase in spending on health care but not an increase in health outcomes.

It is still early in studying these outcomes but these programs are not showing the downstream benefits predicted by some. Indeed, they may be impacting work hours negatively for recipients in some areas.