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Universal basic income
Universal basic income
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3-minute video on universal basic income (2013)
In 2013, eight million 5-centime coins (one per inhabitant) were dumped on the Bundesplatz in Bern to support the 2016 Swiss referendum for a basic income (which was rejected 77% – 23%).

Universal basic income (UBI)[note 1] is a social welfare proposal in which all citizens of a given population regularly receive a minimum income in the form of an unconditional transfer payment, i.e., without a means test or need to perform work.[2][3][4] In contrast, a guaranteed minimum income is paid only to those who do not already receive an income that is enough to live on. A UBI would be received independently of any other income. If the level is sufficient to meet a person's basic needs (i.e., at or above the poverty line), it is considered a full basic income; if it is less than that amount, it is called a partial basic income.[5] As of 2025, no country has implemented a full UBI system, but two countries—Mongolia and Iran—have had a partial UBI in the past.[6] There have been numerous pilot projects,[7] and the idea is discussed in many countries. Some have labelled UBI as utopian due to its historical origin.[8][9][10]

There are several welfare arrangements that can be considered similar to basic income, although they are not unconditional. Many countries have a system of child benefit, which is essentially a basic income for guardians of children. A pension may be a basic income for retired persons. There are also quasi-basic income programs that are limited to certain population groups or time periods, like Bolsa Familia in Brazil, which is concentrated on the poor, or the Thamarat Program in Sudan, which was introduced by the transitional government to ease the effects of the economic crisis inherited from the Bashir regime.[11] Likewise, the economic impact of the COVID-19 pandemic prompted some countries to send direct payments to its citizens. The Alaska Permanent Fund is a fund for all residents of the U.S. state of Alaska which averages $1,600 annually (in 2019 currency), and is sometimes described as the only example of a real basic income in practice. A negative income tax (NIT) can be viewed as a basic income for certain income groups in which citizens receive less and less money until this effect is reversed the more a person earns.[12]

Critics claim that a basic income at an appropriate level for all citizens is not financially feasible, fear that the introduction of a basic income would lead to fewer people working, and consider it socially unjust that everyone should receive the same amount of money regardless of their individual needs. Proponents say it is indeed financeable, arguing that such a system, instead of many individual means-tested social benefits, would eliminate more expensive social administration and bureaucratic efforts, and expect that unattractive jobs would have to be better paid and their working conditions improved because there would have to be an incentive to do them when already receiving an income, which would increase the willingness to work. Advocates also argue that a basic income is fair because it ensures that everyone has a sufficient financial basis to build on and less financial pressure, thus allowing people to find work that suits their interests and strengths.[13]

Early examples of unconditional payments to citizens date back to antiquity, and the first proposals to introduce a regular unconditionally paid income for all citizens were developed and disseminated between the 16th and 18th centuries. After the Industrial Revolution, public awareness and support for the concept increased. At least since the mid-20th century, basic income has repeatedly been the subject of political debates. In the 21st century, several discussions are related to the debate about basic income, including those concerning the automation of large parts of the human workforce through artificial intelligence (AI), and associated questions regarding the future of the necessity of work. A key issue in these debates is whether automation and AI will significantly reduce the number of available jobs and whether a basic income could help prevent or alleviate such problems by allowing everyone to benefit from a society's wealth, as well as whether a UBI could be a stepping stone to a resource-based or post-scarcity economy.

History

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Antiquity

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Ancient Egypt had a strong, unified theocratic state that owned key parts of the Egyptian economy, including granaries that dispensed grain to the public during hard times.[14]

In a 46 BC triumph, Roman general and dictator Julius Caesar gave each common Roman citizen 100 denarii. Following his assassination in 44 BC, Caesar's will left 300 sestertii (or 75 denarii) to each citizen.[15] Trajan, emperor of Rome from 98 to 117 AD, personally gave 650 denarii (equivalent to perhaps US$430 in 2023) to all common Roman citizens who applied.[16]

16th century

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In his Utopia (1516), English statesman and philosopher Thomas More depicts a society in which every person receives a guaranteed income.[17] In this book, basic income is proposed as an answer to the statement "No penalty on earth will stop people from stealing, if it's their only way of getting food", stating:[18]

instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody's under the frightful necessity of becoming first a thief, and then a corpse.

Spanish scholar Johannes Ludovicus Vives (1492–1540) proposed that the municipal government should be responsible for securing a subsistence minimum to all its residents "not on the grounds of justice but for the sake of a more effective exercise of morally required charity." Vives also argued that to qualify for poor relief, the recipient must "deserve the help he or she gets by proving his or her willingness to work."[19]

18th century

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English-born American philosopher Thomas Paine authored Common Sense (1776) and The American Crisis (1776–1783), the two most influential pamphlets at the start of the American Revolution. His essay, Agrarian Justice,[20] was published in 1797. In it, he proposed concrete reforms to abolish poverty. In particular, he proposed a universal social insurance system comprising old-age pensions and disability support, and universal stakeholder grants for young adults, funded by a 10% inheritance tax focused on land, it is also considered one of the earliest proposals for a social security system. Thomas Paine summarized his view by stating that "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds." Paine saw inheritance as being partly a common fund and wanted to supplement the citizen's dividend in a tax on inheritance transfers.

In 1797, English Radical Thomas Spence published The Rights of Infants[21] as a response to Thomas Paine's Agrarian Justice. In this essay Spence proposes the introduction of an unconditional basic income to all members of the community. Such allowance would be financed through the socialization of land and the benefits of the rents received by each municipality. A part of everyone's earnings would be seized by the State, and given to others.

19th century

[edit]

Henry George proposed to create a pension and disability system, and a broad social support system from a single tax on land and natural resource value. Social support would be distributed to residents "as a right" instead of as charity. George mentioned, but did not stress, the possibility of direct cash distribution of land rent. His ideas gave rise to the economic philosophy now known as Georgism or the "single tax movement", which is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land—including from all natural resources, the commons, and urban locations—should belong equally to all members of society.[22][23][24] Some Georgists refer to unconditional basic income funded by the single tax as a citizen's dividend in reference to Thomas Paine's proposal from the 19th century.

Early 20th century

[edit]

Around 1920, support for basic income started growing, primarily in England.

Bertrand Russell (1872–1970) argued for a new social model that combined the advantages of socialism and anarchism, and that basic income should be a vital component in that new society. In his 1918 book Roads to Freedom, Russell wrote "... the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income – as much larger as might be warranted by the total amount of commodities produced – should be given to those who are willing to engage in some work which the community recognizes as useful..."[25]

In the United Kingdom at the end of World War I, Dennis and Mabel Milner, a Quaker married couple of the Labour Party, published a short pamphlet entitled "Scheme for a State Bonus" (1918) that argued for the "introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom." They considered it a moral right for everyone to have the means to subsistence, and thus it should not be conditional on work or willingness to work.[26][27]

C. H. Douglas was an engineer who became concerned that most British citizens could not afford to buy the goods that were produced, despite the rising productivity in British industry. His solution to this paradox was a new social system he called social credit, a combination of monetary reform and basic income.

In 1944 and 1945, the Beveridge Committee, led by the British economist William Beveridge, developed a proposal for a comprehensive new welfare system of social insurance, means-tested benefits, and unconditional allowances for children. Committee member Lady Rhys-Williams argued that the incomes for adults should be more like a basic income. She was also the first to develop the negative income tax model.[28][29] Her son Sir Brandon Rhys-Williams proposed a basic income to a parliamentary committee in 1982, and soon after that in 1984, the Basic Income Research Group, now the Citizen's Basic Income Trust, began to conduct and disseminate research on basic income.[30]

Late 20th century

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Milton Friedman proposed a negative income tax (NIT), which effectively sanctioned a basic income for all, in his 1962 book Capitalism and Freedom.[26] In his 1964 State of the Union address, U.S. President Lyndon B. Johnson declared an "unconditional war on poverty," implemented in coming years with sweeping legislation.[31] Johnson broadened the agenda to the Great Society, including education, civil rights, health care, and support for the arts.[32] In this political climate, the idea of a guaranteed income for every American also took root.[33] Notably, a 1968 document, signed by 1200 economists, called for a guaranteed income for every American.[34] Four ambitious basic income experiments started on the related concept of negative income tax.[35] President Richard Nixon explained the Family Assistance Plan's purpose as to provide both a safety net for the poor and a financial incentive for welfare recipients to work.[36] Congress eventually approved a guaranteed minimum income for the elderly and the disabled.[36]

In the mid-1970s, the main competitor to basic income and negative income tax, the Earned income tax credit (EITC) and its advocates won over enough legislators for the US Congress to pass laws on that policy.[37] In 1986, the Basic Income European Network (later renamed the Basic Income Earth Network (BIEN)) was founded, with academic conferences every second year.[38] Other advocates included the green political movement, other activists, and some groups of unemployed people.[39]

In the late 20th century, discussions were held around automatization and jobless growth,[40] the possibility of combining economic growth with ecologically sustainable development, and how to reform the welfare state bureaucracy.[41] Basic income was interwoven in these and many other debates.[42] During the BIEN academic conferences, scholars published papers about basic income from a wide variety of perspectives.[43]

21st century

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In recent years, the idea has come to the forefront more than before. The Swiss referendum about basic income in 2016 was covered in media worldwide, despite its rejection.[44] Famous business people like Elon Musk,[45] Pierre Omidyar,[46] and Andrew Yang have lent their support, as have high-profile politicians like Jeremy Corbyn[47] and Tulsi Gabbard.[48] The Institute for Public Policy Research predicted that 59% of tasks currently done by humans could be affected by AI in the next three to five years. Universal basic Income could help fill the gap left by this "jobs apocalypse."[49]

In 2019-2021, in Stockton, California, then-Mayor Michael Tubbs initiated an 24-month pilot program of guaranteed income for 125 residents as part of the privately funded S.E.E.D. project there.[50][51]

In the 2020 Democratic Party primaries, political newcomer Andrew Yang touted basic income as his core policy. His policy, referred to as a "Freedom Dividend", would have provided adult American citizens US$1,000 a month independent of employment status.[52]

On 21 January 2021, in California, the two-year donor-funded Compton Pledge[50] began distributing monthly guaranteed income payments to a "pre-verified" pool of low-income residents,[50] in a program gauged for a maximum of 800 recipients, at which point it would be one of the larger among 25 U.S. cities exploring this approach to community economics.

Beginning in December 2021, Tacoma, Washington, piloted "Growing Resilience in Tacoma" (GRIT), a guaranteed income initiative that provided $500 a month to 110 families. GRIT is part of the University of Pennsylvania's Center for Guaranteed Income Research larger study. A report on the results of the GRIT experiment was published in 2024.[53]

Response to COVID-19

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As a response to the COVID-19 pandemic and its economic impact, universal basic income and similar proposals such as helicopter money and cash transfers were increasingly discussed across the world.[54] Most countries implemented forms of partial unemployment schemes, which effectively subsidized workers' incomes without a work requirement. Around ninety countries and regions including the United States, Spain, Hong Kong, and Japan introduced temporary direct cash transfer programs to their citizens.[55][56]

In Europe, a petition calling for an "emergency basic income" gathered more than 200,000 signatures,[57] and polls suggested widespread support in public opinion for it.[58][59] Unlike the various stimulus packages of the US administration, the EU's stimulus plans did not include any form of income-support policies.[60]

Basic income vs negative income tax

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Two ways of looking at basic income when combined with a flat income tax, both of which result in the same net income (orange line): 1. (red) stipend with conventional tax for income above the stipend. 2. (blue) negative tax for low-income people and conventional tax for high-income people.

The diagram at right shows a basic income/negative tax system combined with flat income tax (the same percentage in tax for every income level). Y is here the pre-tax salary given by the employer and y' is the net income.

Negative income tax

For low earnings, there is no income tax in the negative income tax system. They receive money, in the form of a negative income tax, but they do not pay any tax. Then, as their labour income increases, this benefit, this money from the state, gradually decreases. That decrease is to be seen as a mechanism for the poor, instead of the poor paying tax.

Basic income

That is, however, not the case in the corresponding basic income system in the diagram at right. There, everyone typically pays income taxes. But on the other hand, everyone also gets the same amount of basic income.

But the net income is the same

But, as the orange line in the diagram shows, the net income is anyway the same. No matter how much or how little one earns, the amount of money received is the same, regardless of which of these two systems are used.

Basic income and negative income tax are generally seen to be similar in economic net effects, but there are some differences:

Philippe Van Parijs in his library
  • Psychological. Philip Harvey accepts that "both systems would have the same redistributive effect and tax earned income at the same marginal rate" but does not agree that "the two systems would be perceived by taxpayers as costing the same".[61]: 15, 13 
  • Tax profile. Tony Atkinson made a distinction based on whether the tax profile was flat (for basic income) or variable (for NIT).[62]
  • Timing. Philippe Van Parijs states that "the economic equivalence between the two programs should not hide the fact that they have different effects on recipients because of the different timing of payments: ex-ante in Basic Income, ex-post in Negative Income Tax".[63]

Perspectives and arguments

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Automation

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There is a prevailing opinion that we are in an era of technological unemployment – that technology is increasingly making skilled workers obsolete.

Prof. Mark MacCarthy (2014)[64]

One central rationale for basic income is the belief that automation and robotisation could result in technological unemployment, leading to a world with fewer paid jobs. A key question in this context is whether a basic income could help prevent or alleviate such problems by allowing everyone to benefit from a society's wealth, as well as whether a UBI could be a stepping stone to a resource-based or post-scarcity economy.[45][65][66][67]

U.S. presidential candidate and nonprofit founder Andrew Yang has stated that automation caused the loss of 4 million manufacturing jobs and advocated for a UBI (which he calls a Freedom Dividend) of $1,000/month rather than worker retraining programs.[68] Yang has stated that he is influenced by Martin Ford. Ford believes that the emerging technologies will fail to deliver much employment; on the contrary, because the new industries will "rarely, if ever, be highly labor-intensive".[69] Similar ideas have been debated before in history—that "the machines will take the jobs". What is new is the existence of several academic studies that forecast a future with substantially less employment, in the decades to come.[70][71][72] Additionally, US President Barack Obama stated that he believes that the growth of artificial intelligence will lead to an increased discussion around the idea of "unconditional free money for everyone".[73]

Economics and costs

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Some proponents of UBI have argued that basic income could increase economic growth because it would sustain people while they invest in education to get higher-skilled and well-paid jobs.[74][75] However, there is also a discussion of basic income within the degrowth movement, which argues against economic growth.[76]

Advocates contend that the guaranteed financial security of a UBI will increase the population's willingness to take risks,[77] which would create a culture of inventiveness and strengthen entrepreneurial spirit.[78]

The cost of a basic income is one of the biggest questions in the public debate as well as in the research and depends on many things. It first and foremost depends on the level of the basic income as such, and it also depends on many technical points regarding exactly how it is constructed.

While opponents claim that a basic income at an adequate level for all citizens cannot be financed, their supporters propose that it could indeed be financed, with some advocating a strong redistribution and restructuring of bureaucracy and administration for this purpose.[79]

According to statements of American Enterprise Institute-affiliated Libertarian/conservative scholar Charles Murray, recalled and sanctioned in 2016 by the George Gibbs Chair in Political Economy and Senior Research Fellow at the Mercatus Center at George Mason University and nationally syndicated columnist[80][81] Veronique de Rugy, as of 2014, the annual cost of a UBI in the US would have been about $200 billion less expensive than the US social safety-net system put in place at that date.[82] By 2020, it would have been nearly a trillion dollars less expensive.[83]

American economist Karl Widerquist argues that simply multiplying the amount of the grant by the population would be a naive calculation, as this is the gross costs of UBI and does not take into account that UBI is a system where people pay taxes on a regular basis and receive the grant at the same time.[84]

According to Swiss economist Thomas Straubhaar, the concept of UBI is basically financeable without any problems. He describes it as "at its core, nothing more than a fundamental tax reform" that "bundles all social policy measures into a single instrument, the basic income paid out unconditionally."[85] He also considers a universal basic income to be socially just, arguing that although all citizens would receive the same amount in the form of the basic income at the beginning of the month, the rich would have lost significantly more money through taxes at the end of the month than they would have received through the basic income, while the opposite is the case for poorer people, similar to the concept of a negative income tax.[85]

Recent theoretical work has introduced alternative mathematical approaches to the allocation of basic income. One such example is the Boltzmann fair division model, which applies the Boltzmann distribution from statistical mechanics to resource or income allocation.[86] In this framework, each individual's share is assigned probabilistically according to an exponential function of a specified attribute (such as need or contribution), providing a flexible mechanism to balance fairness and efficiency in basic income distribution.

Inflation of labor and rental costs

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One of the most common arguments against UBI stems from the upward pressure on prices, in particular for labor and housing rents, which would likely cause inflation.[87] Public policy choices such as rent controls or land value taxation would likely affect the inflationary potential of universal basic income.[87]

Work

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Many critics of basic income argue that people, in general, will work less, which in turn means less tax revenue and less money for the state and local governments.[88][89][90][91] Studies include:

  • In negative income tax experiments in the United States in 1970, there was a five percent decline in the hours worked. The work reduction was largest for second earners in two-earner households and weakest for primary earners. The reduction in hours was higher when the benefit was higher.[89]
  • In the Mincome experiment in rural Dauphin, Manitoba, also in the 1970s, there were slight reductions in hours worked during the experiment. However, the only two groups who worked significantly less were new mothers, and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling.[92]
  • A 2024 study investigated the impact of $1,000/month UBI over a period of 3 years for 1,000 randomized low-income participants in two U.S. states, which represented an around 40% increase in household income. The study found an income effect with a decrease of non-UBI income by $1,500/year, a decrease in non-UBI household income by 21% of the UBI transfer, a 2% decrease in labor market participation, no significant change in time spent on childcare, no self-reported decrease in barriers to employment, a null result for changes in job quality, an increase in entrepreneurial orientation but no significant change in entrepreneurial activity, while enrollment in tertiary education showed a slight increase for participants below 30 years of age.[93]

Although it is difficult to know for sure what will happen if a whole country introduces basic income, there are nevertheless some studies that have attempted to look at this question:

Regarding the question of basic income vs jobs, there is also the aspect of so-called welfare traps. Proponents of basic income often argue that with a basic income, unattractive jobs would necessarily have to be better paid and their working conditions improved, so that people still do them without need, reducing these traps.[95]

Philosophy and morality

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By definition, universal basic income does not make a distinction between "deserving" and "undeserving" individuals when making payments. Opponents argue that this lack of discrimination is unfair: "Those who genuinely choose idleness or unproductive activities cannot expect those who have committed to doing productive work to subsidize their livelihood. Responsibility is central to fairness."[96]

Proponents usually view UBI as a fundamental human right that enables an adequate standard of living which every citizen should have access to in modern society.[97] It would be a kind of foundation guaranteed for everyone, on which one could build and never fall below that subsistence level.

It is also argued that this lack of discrimination between those who supposedly deserve it and those who do not is a way to reduce social stigma.[96]

In addition, proponents of UBI may argue that the "deserving" and "undeserving" categories are a superficial classification, as people who are not in regular gainful employment also contribute to society, e.g. by raising children, caring for people, or doing other value-creating activities which are not institutionalized. UBI would provide a balance here and thus overcomes a concept of work that is reduced to pure gainful employment and disregards sideline activities too much.[98]

Health and poverty

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The first comprehensive systematic review of the health impact of basic income (or rather unconditional cash transfers in general) in low- and middle-income countries, a study that included 21 studies of which 16 were randomized controlled trials, found a clinically meaningful reduction in the likelihood of being sick by an estimated 27%. Unconditional cash transfers, according to the study, may also improve food security and dietary diversity. Children in recipient families are also more likely to attend school and the cash transfers may increase money spent on health care.[99] A 2022 update of this review confirmed these findings based on a body of evidence (35 studies, the majority being large randomized controlled trials) and additionally found that unconditional cash transfers also reduce the likelihood of living in extreme poverty.[100]

The Canadian Medical Association passed a motion in 2015 in support of basic income and for basic income trials in Canada.[101]

Advocates

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Pilot programs and experiments

[edit]
Omitara, one of the two poor villages in Namibia where a local basic income was tested in 2008–2009

Since the 1960s, but in particular since the late 2000s, several pilot programs and experiments on basic income have been conducted around the world. Some examples include:

1960s−1970s

[edit]
  • Experiments with negative income tax in the United States and Canada in the 1960s and 1970s.
  • The province of Manitoba, Canada experimented with Mincome, a basic guaranteed income, in the 1970s. In the town of Dauphin, Manitoba, labor decreased by 13%, less than expected. This program was ended after issues with the cost becoming unsustainable started to arise.[102][103]

2000−2009

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  • The basic income grant in Namibia launched in 2008 and ended in 2009.[104]
  • An independent pilot implemented in São Paulo, Brazil launched in 2009.[105]

2010−2019

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  • Basic income trials ran in 2011–2012 in several villages in India,[106] whose government has proposed a guaranteed basic income for all citizens.[107] It was found that basic income in the region raised the education rate of young people by 25%.[108]
  • Iran became the first country to introduce a system of UBI in December 2010.[109][110] It was paid to all citizens and replaced the gasoline subsidies, electricity, and some food,[111] that the country applied for years to reduce inequalities and poverty. The sum corresponded in 2012 to approximately US$40 per person per month, US$480 per year for a single person, and US$2,300 for a family of five people.[112][113]
  • In Spain, the ingreso mínimo vital, the income guarantee system, is an economic benefit guaranteed by the social security in Spain, but in 2016 was considered in need of reform.[114]
  • In South Korea the Youth Allowance Program was started in 2016 in the City of Seongnam, which would give every 24-year-old citizen 250,000 won (~US$215) every quarter in the form of a "local currency" that could only be used in local businesses. This program was later expanded to the entire province of Gyeonggi in 2018.[115][116]
  • The GiveDirectly experiment in a disadvantaged village of Nairobi, Kenya, benefitting over 20,000 people living in rural Kenya, was the longest-running basic income pilot as of November 2017, which is set to run for 12 years.[117][118][119]
  • A project called Eight in a village in Fort Portal, Uganda, was launched by a nonprofit organization in January 2017, providing income for 56 adults and 88 children through mobile money.[120]
  • A two-year pilot the Finnish government began in January 2017 involved 2,000 subjects.[121][122] In April 2018, the Finnish government rejected a request for funds to extend and expand the program from Kela (Finland's social security agency).[123]
  • An experiment in the city of Utrecht, Netherlands launched in early 2017, that is testing different rates of aid.[107]
  • A three-year basic income pilot that the Ontario provincial government, Canada, launched in the cities of Hamilton, Thunder Bay and Lindsay in July 2017.[124] Although called basic income, it was only made available to those with a low income and funding would be removed if they obtained employment,[125] making it more related to the current welfare system than true basic income. The pilot project was canceled on 31 July 2018 by the newly elected Progressive Conservative government under Ontario Premier Doug Ford.
  • In Israel, in 2018 a non-profit initiative GoodDollar started with an objective to build a global economic framework for providing universal, sustainable, and scalable basic income through the new digital asset technology of blockchain. The non-profit aims to launch a peer-to-peer money transfer network in which money can be distributed to those most in need, regardless of their location, based on the principles of UBI. The project raised US$1 million from a financial company.[126][127]
  • The Rythu Bandhu scheme is a welfare scheme started in the state of Telangana, India, in May 2018, aimed at helping farmers. Each farm owner receives 4,000 INR per acre twice a year for rabi and kharif harvests. To finance the program a budget allocation of 120 billion INR (US$1.55 Billion as of May 2022) was made in the 2018–2019 state budget.[128]

2020−present

[edit]
  • Swiss non-profit Social Income started paying out basic incomes in the form of mobile money in 2020 to people in need in Sierra Leone. Contributions finance the international initiative from people worldwide, who donate 1% of their monthly paychecks.[129]
  • In May 2020, Spain introduced a minimum basic income, reaching about 2% of the population, in response to COVID-19 in order to "fight a spike in poverty due to the coronavirus pandemic". It was expected to cost state coffers three billion euros ($3.5 billion) a year."[130]
  • In August 2020, a project in Germany started that gives a €1,200 monthly basic income in a lottery system to citizens who applied online. The crowdsourced project lasted three years and be compared against 1,380 people who do not receive basic income.[131] When the project was finished in August 2023, Mein Grundeinkommen calculated that a tax-financed universal basic income of €1,200 per month could be financed for every adult in Germany that would make 80% of adults better off.[132]
  • In October 2020, HudsonUP[133] was launched in Hudson, New York, by The Spark of Hudson[134] and Humanity Forward Foundation[135] to give $500 monthly basic income to 25 residents. It will last five years and be compared against 50 people who are not receiving basic income.
  • In May 2021, the government of Wales, which has devolved powers in matters of Social Welfare within the UK, announced the trialling of a universal basic income scheme to "see whether the promises that basic income holds out are genuinely delivered".[136] From July 2022 over 500 people leaving care in Wales were offered £1600 per month in a 3-year £20 million pilot scheme, to evaluate the effect on the lives of those involved in the hope of providing independence and security to people.[137]
  • In July 2022, Chicago began a year-long guaranteed income program by sending $500 a month to 5,000 households for one year in a lottery system to citizens who applied online.[138] A similar program was launched in late 2022 by Cook County, Illinois (which encompasses the entirety of Chicago as well as several suburbs) which sent monthly $500 payments to 3,250 residents with a household income at or below 250% of the federal poverty level for two years.[139]
  • In June 2023, The Guardian reported that a universal basic income of £1,600 a month is to be trialled in two places in England – Jarrow and East Finchley.[140]
  • In February 2025, South Korea announced a "farmers' opportunity income" plan to be integrated into their basic income for farmers, and deployed in 24 cities and counties of the Gyeonggi Province. An estimated 210,000 selected farmers and fishermen will receive either 1.8 million won annually or 50,000 won monthly.[141][142]
  • In March 2025, the Government of Delhi in India approved the "Mahila Samridhi Yojana" plan, under which eligible women would receive a monthly allowance of 2,500, based on financial status for women below the poverty line.[141][143]

Payments with similarities

[edit]

Alaska Permanent Fund

[edit]

The Permanent Fund of Alaska in the United States provides a kind of yearly basic income based on the oil and gas revenues of the state to nearly all state residents. More precisely the fund resembles a sovereign wealth fund, investing resource revenues into bonds, stocks, and other conservative investment options with the intent to generate renewable revenue for future generations. The fund has had a noticeable yet diminishing effect on reducing poverty among rural Alaska Indigenous people, notably in the elderly population.[144] However, the payment is not high enough to cover basic expenses, averaging $1,600 annually per resident in 2019 currency[145] (As of 2019 it has never exceeded $2,100), and is not a fixed, guaranteed amount. For these reasons, it is not always considered a basic income. However, some consider it to be the only example of a real basic income.[146][147]

Wealth Partaking Scheme

[edit]

Macau's Wealth Partaking Scheme provides some annual basic income to permanent residents, funded by revenues from the city's casinos. However, the amount disbursed is not sufficient to cover basic living expenses, so it is not considered a basic income.[148]

Bolsa Família

[edit]

Bolsa Família is a large social welfare program in Brazil that provides money to many low-income families in the country. The system is related to basic income, but has more conditions, like asking the recipients to keep their children in school until graduation. As of March 2020, the program covers 13.8 million families, and pays an average of $34 per month, in a country where the minimum wage is $190 per month.[149]

Eastern Band of Cherokee Indians

[edit]

The Eastern Band of Cherokee Indians (ECBI) opened Harrah's Cherokee Casino in 1997 and it has generated jobs and revenue for the tribe, providing money that the EBCI applies to its people's education, welfare and culture. Each member of the tribe is paid an annual income that started at $500 and has increased to $10,000 as of 2015.[150][better source needed]

Other welfare programs

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  • Pension: A payment that in some countries is guaranteed to all citizens above a certain age. The difference from true basic income is that it is restricted to people over a certain age.
  • Child benefit: A program similar to pensions but restricted to parents of children, usually allocated based on the number of children.
  • Conditional cash transfer: A regular payment given to families, but only to the poor. It is usually dependent on basic conditions such as sending their children to school or having them vaccinated. Programs include Bolsa Família in Brazil and Programa Prospera in Mexico.
  • Guaranteed minimum income differs from a basic income in that it is restricted to those in search of work and possibly other restrictions, such as savings being below a certain level. Example programs are unemployment benefits in the UK, the revenu de solidarité active in France, and citizens' income in Italy.

Petitions, polls and referendums

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  • 2008: An official petition for basic income was launched in Germany by Susanne Wiest.[151] The petition was accepted, and Susanne Wiest was invited for a hearing at the German parliament's Commission of Petitions. After the hearing, the petition was closed as "unrealizable".[152]
  • 2013–2014: A European Citizens' Initiative collected 280,000 signatures demanding that the European Commission study the concept of an unconditional basic income.[153]
  • 2015: A citizen's initiative in Spain received 185,000 signatures, short of the required number to mandate that the Spanish parliament discuss the proposal.[154]
  • 2016: The world's first universal basic income referendum in Switzerland on 5 June 2016 was rejected with a 76.9% majority.[155][156] Also in 2016, a poll showed that 58% of the EU's population is aware of basic income, and 64% would vote in favour of the idea.[157]
  • 2017: Politico/Morning Consult asked 1,994 Americans about their opinions on several political issues including national basic income; 43% either "strongly supported" or "somewhat supported" the idea.[158]
  • 2018: The results of a poll by Gallup conducted last year between September and October were published. 48% of respondents supported universal basic income.[159]
  • 2019: In November, an Austrian initiative received approximately 70,000 signatures but failed to reach the 100,000 signatures needed for a parliamentary discussion. The initiative was started by Peter Hofer. His proposal suggested a basic income sourced from a financial transaction tax, of €1,200, for every Austrian citizen.[160]
  • 2020: A study by Oxford University found that 71% of Europeans are now in favour of basic income. The study was conducted in March, with 12,000 respondents and in 27 EU-member states and the UK.[161] A YouGov poll likewise found a majority for universal basic income in United Kingdom[162] and a poll by University of Chicago found that 51% of Americans aged 18–36 support a monthly basic income of $1,000.[163] In the UK there was also a letter, signed by over 170 MPs and Lords from multiple political parties, calling on the government to introduce a universal basic income during the COVID-19 pandemic.[164]
  • 2020: A Pew Research Center survey, conducted online in August 2020, of 11,000 U.S. adults found that a majority (54%) oppose the federal government providing a guaranteed income of $1,000 per month to all adults, while 45% support it.[165]
  • 2020: In a poll by Hill-HarrisX, 55% of Americans voted in favour of UBI in August, up from 49% in September 2019 and 43% in February 2019.[166]
  • 2020: The results of an online survey of 2,031 participants conducted in 2018 in Germany were published: 51% were either "very much in favor" or "in favor" of UBI being introduced.[167]
  • 2020: An October survey of 1,026 Australians by YouGov found a 58% support for universal basic income.[168]
  • 2021: A Change.org petition calling for monthly stimulus checks in the amount of $2,000 per adult and $1,000 per child for the remainder of the COVID-19 pandemic had received almost 3 million signatures.[169]

See also

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Notes

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References

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Further reading

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Revisions and contributorsEdit on WikipediaRead on Wikipedia
from Grokipedia
Universal basic income (UBI) is a proposal entailing periodic, unconditional cash transfers to all members of a , regardless of , status, , or other means-tested criteria, with the aim of providing a financial floor to prevent destitution and simplify welfare administration. The concept traces its intellectual roots to 18th-century thinkers like , who advocated lump-sum payments from land rents to citizens, and has been refined in modern economics through variants such as Milton Friedman's , which tapers benefits with earnings to minimize work disincentives. Proponents argue UBI could address , reduce bureaucratic overhead in conditional welfare systems, and mitigate job displacement from , while empirical pilots—such as Finland's 2017-2018 offering €560 monthly to 2,000 unemployed individuals and GiveDirectly's ongoing study providing $22 monthly—have shown modest improvements in , , and even labor participation without significant reductions. Critics, including fiscal analyses from institutions like the Center on Budget and Policy Priorities, highlight UBI's prohibitive cost—potentially requiring tax hikes exceeding 30-50% of GDP in advanced economies to fund payments at subsistence levels—and risks of crowding out targeted aid, inflating prices, or eroding work incentives at scale, effects untested in comprehensive implementations. Despite endorsements from figures like Martin Luther King Jr. in the 1960s for its potential to combat inequality, full-scale adoption remains limited to partial approximations like Alaska's oil-funded dividend, with global experiments revealing short-term benefits in recipient autonomy but underscoring unresolved questions about long-term macroeconomic distortions and dependency.

Definition and Core Features

Precise Definition and Eligibility Criteria

Universal basic income (UBI) is defined as a regular, unconditional cash payment delivered by the government to all individual members of a specified population, without means-testing, work requirements, or other behavioral conditions. This structure distinguishes UBI from traditional welfare programs, which typically impose eligibility restrictions based on income thresholds, employment status, or asset levels. The payment is periodic—often monthly—and fixed in amount, intended to cover basic needs while allowing recipients to supplement it through labor or other means. In theoretical formulations, UBI's universality extends to every person within the jurisdiction, including children, the elderly, and the unemployed, with the amount potentially scaled by age (e.g., lower for minors). Proponents emphasize that the absence of conditions preserves individual autonomy and avoids administrative inefficiencies associated with targeted benefits, such as stigma or fraud detection. However, actual policy proposals often incorporate minimal eligibility criteria to align with fiscal and legal constraints, such as requiring legal residency, citizenship, or adulthood (typically age 18 or older), while excluding incarcerated individuals or non-residents. For instance, U.S.-focused proposals commonly limit benefits to adult citizens meeting basic residency rules, with child payments routed through guardians at reduced rates. These criteria reflect a tension between the pure universality ideal—encompassing all persons without exception—and pragmatic implementations that define the population scope to ensure feasibility, such as excluding tourists or undocumented migrants to prevent administrative burdens or incentive distortions. Economists note that deviations from strict universality, like age-based phasing or residency tests, maintain the core unconditional nature but may introduce subtle targeting elements. No implemented national UBI adheres perfectly to the unrestricted definition, as pilots and proposals universally incorporate jurisdictional boundaries. Universal basic income (UBI) encompasses several variations that differ in scope, eligibility, and implementation, often adapting the core idea of unconditional cash payments to address fiscal constraints, administrative feasibility, or specific policy goals. These include fully universal payments to all adults regardless of income or status, as well as partial forms targeting subsets of the , such as children or the elderly, which function as basic incomes in systems like child allowances or universal pensions. Variations may also incorporate means-testing or phase-outs to limit costs, diverging from strict universality while retaining elements of guaranteed support. A prominent variation is the (NIT), proposed by economist in his 1962 book , which supplements incomes below a specified exemption level through credits that decrease as earnings rise, effectively providing a guaranteed minimum without payments to those above the threshold. Unlike UBI, NIT is means-tested and avoids universal payouts, aiming to minimize disincentives to work by preserving marginal rates on additional earnings, though it requires income verification and can create administrative complexity. Empirical evaluations, such as U.S. NIT experiments from 1968 to 1982, showed modest labor supply reductions primarily among secondary earners, contrasting with UBI pilots that often report neutral or positive work effects due to their unconditional nature. Targeted basic income schemes represent another variation, directing payments to low-income households or vulnerable groups to enhance efficiency over universality, as evidenced by comparative analyses in developing contexts where universal transfers risk diluting antipoverty impacts amid resource scarcity. These differ from UBI by imposing eligibility criteria, which can reduce stigma and leakage to non-poor recipients but introduce errors in targeting—such as exclusion of deserving individuals—and higher administrative costs from verification processes. For instance, programs like the U.S. Earned Income Tax Credit (EITC) function as a related targeted supplement, refunding a percentage of low wages without universality, though they phase out benefits and tie support to employment, potentially discouraging non-workers more than UBI. Related concepts include guaranteed minimum income policies in various jurisdictions, such as the European Union's active inclusion strategies that blend cash support with job activation, and resource-based dividends like Alaska's Permanent Fund Dividend, which distributes oil revenues annually to residents as a partial, unconditional payment approximating basic income principles without broad taxation. Sovereign wealth funds in Norway or sovereign wealth accounts proposals extend this by proposing citizen shares in national assets, providing dividends that sidestep means-testing while linking payments to endowment returns rather than general revenue. Conditional cash transfers, prevalent in Latin America (e.g., Brazil's Bolsa Família since 2003), impose behavioral requirements like school attendance, contrasting UBI's unconditionality but sharing goals of poverty alleviation through direct payments. These alternatives highlight trade-offs: universality fosters simplicity and social solidarity but escalates fiscal demands, while targeted or conditional variants prioritize cost-control and behavioral incentives, often at the expense of coverage universality.

Theoretical Foundations

Economic Rationales Supporting UBI

One primary economic rationale for universal basic income (UBI) is the potential to reduce the administrative inefficiencies and high overhead costs associated with means-tested welfare systems. Complex eligibility determinations, verification processes, and multiple overlapping programs in systems like the U.S. consume significant resources; for example, administrative costs for U.S. social assistance programs can exceed 10-15% of total expenditures in some cases, diverting funds from direct aid. By contrast, UBI's unconditional structure eliminates bureaucracy related to verification and fraud prevention, potentially lowering these costs to near zero while simplifying delivery through existing tax infrastructure. This efficiency argument echoes Milton Friedman's advocacy for a —a tapered guaranteed mechanism—as a replacement for fragmented welfare, which he argued would minimize government intervention and paternalistic in-kind aid in favor of cash transfers that recipients could allocate optimally. UBI is also posited to mitigate poverty traps inherent in conditional benefits, where high effective marginal tax rates—often exceeding 100% due to benefit phase-outs—discourage additional earnings and labor force participation. Under means-tested systems, individuals facing benefit cliffs may rationally choose not to work or underreport to preserve eligibility, perpetuating dependency and reducing overall economic output. A flat UBI avoids such distortions by decoupling support from employment status, theoretically flattening incentives across the spectrum and enabling smoother transitions into work without abrupt losses in support. Empirical analogs, such as Friedman's proposal, aimed to address this by guaranteeing a minimum that phases out gradually, preserving work incentives better than categorical ; proponents extend this logic to full UBI as a more uniform solution absent phase-out complexities. In response to technological advancements and potential automation-induced job displacement, UBI offers a mechanism to maintain and labor mobility without the rigidities of or retraining mandates. Economists like anticipated "" where machines outpace job creation, suggesting a basic income floor could sustain consumption and facilitate voluntary job searches or amid structural shifts. Past technological revolutions, such as the Industrial Revolution and the computer era, initially caused fears of widespread job loss but ultimately led to net employment increases rather than collapses, creating new opportunities though transitions were painful. Modern analyses project that AI could automate 25-50% of tasks in advanced economies, risking short-term spikes; UBI, by providing liquidity without work requirements, could buffer these shocks, potentially boosting GDP through sustained spending rather than recessionary spirals from mass idleness. However, this rationale assumes funding via non-distortionary means, such as land value taxes or dividends, to avoid offsetting labor disincentives through higher income taxes. Additionally, UBI may enhance macroeconomic stability by acting as an , injecting funds during downturns without discretionary policy lags. Unlike targeted stimuli prone to administrative delays, universal payments ensure rapid dissemination to all households, amplifying multipliers through consumption; simulations indicate that a $1,000 monthly UBI could yield 1.5-2.0 times in economic activity via effects, particularly among low-income recipients with high marginal propensities to spend. This aligns with neoliberal efficiency critiques of welfare, prioritizing cash over services to empower individual choice and reduce deadweight losses from government allocation errors.

Philosophical and Moral Justifications

Philosopher has advanced a prominent justification for universal basic income (UBI) rooted in the concept of "real libertarianism," positing that a just society maximizes the real freedom of all individuals by providing an unconditional income floor derived from the equal division of external resources, such as natural endowments and socially produced assets. This approach extends ' difference principle by arguing that the least advantaged should receive resources enabling the highest sustainable unconditional income, allowing people the to pursue diverse life paths, including voluntary non-employment, without coercive work requirements. Van Parijs contends this framework achieves by compensating for unchosen inequalities in talents and circumstances, framing UBI as a on common heritage rather than a handout. Libertarian thinkers, such as Matt Zwolinski, offer a case for UBI by emphasizing its superiority to existing welfare systems in respecting individual autonomy through cash transfers, which avoid paternalistic in-kind aid and bureaucratic oversight that infringe on personal judgment. Zwolinski argues that UBI aligns with libertarian principles by potentially serving as restitution for historical injustices or a citizen's share of rents, thereby minimizing state intervention while addressing without the disincentives and administrative costs of means-tested programs. This view holds that unconditional payments better honor property rights and compared to conditional welfare, which imposes behavioral mandates akin to partial servitude. From an ethical standpoint, proponents invoke human dignity and the to eradicate involuntary , asserting that UBI ensures a baseline security enabling genuine choice and self-realization, unencumbered by desperation-driven labor. Advocates like Van Parijs counter moral objections—such as freeloading on workers' efforts—by noting that gains from technological progress and inherited fortunes already permit such distributions without net harm, prioritizing over reciprocal contribution norms. Some draw on , interpreting societal membership as requiring contributions but allowing UBI to facilitate voluntary usefulness rather than forced labor, though this interpretation remains debated among philosophers. Rawlsian arguments for UBI focus on its role in maximizing the position of the worst-off under the veil of ignorance, where rational agents might endorse an unconditional grant to hedge against endowment lotteries, though critics contend Rawls preferred work-conditioned transfers to incentivize social cooperation. Overall, these justifications emphasize UBI's potential to foster equality of opportunity and reduce exploitation, but they presuppose feasible funding without excessive taxation that could undermine the freedoms purportedly enhanced.

Critiques of Theoretical Assumptions

Critics of universal basic income (UBI) challenge the assumption that unconditional cash transfers would not significantly distort labor supply, arguing that standard economic theory predicts an income effect whereby recipients reduce work effort as their non-labor income rises, independent of any from taxation. This effect stems from the backward-bending labor supply curve observed in empirical models, where higher lowers the of additional earnings, leading individuals—particularly those with lower wages or attachment to the —to opt for more leisure. Proponents often downplay this by citing subsistence needs in developing contexts or assuming cultural work norms persist, but theorists like contend that UBI ignores these dynamics, favoring instead targeted incentives such as the , which ties benefits to employment and empirically boosts participation among low earners. Historical trials in the United States from 1968 to 1980 substantiated this critique, revealing reductions in desired work hours by 9% for married men, 20% for wives, and up to 43% for single males, alongside extended unemployment durations. Another theoretical flaw lies in UBI's neglect of , the risk that unconditional payments encourage dependency by severing benefits from productive behavior, contrary to the assumption that humans inherently pursue self-improvement through work. Economic models incorporating behavioral responses highlight how such transfers can erode the intrinsic motivations for labor, such as skill-building and social contribution, fostering a culture of idleness that burdens net contributors. This aligns with principal-agent theory, where absent monitoring or conditionality, agents (recipients) shirk responsibilities, amplifying free-rider problems in a reliant on collective output; for instance, funding UBI via progressive taxes imposes deadweight losses on workers while subsidizing non-workers, distorting overall incentives without addressing root causes like skill mismatches. Critics argue this undermines causal realism in policy design, as real-world human agency thrives on reciprocity rather than guaranteed provision, potentially leading to reduced and societal cohesion over time. Philosophically, UBI rests on a contested view of that prioritizes unconditional entitlement over and reciprocity, assuming all individuals deserve equal shares of resources irrespective of contribution, which theorists rebut as permitting exploitation of producers by non-producers. The reciprocity principle, articulated in works like William Galston's analysis, posits that social benefits impose a to contribute where feasible, as unreciprocated transfers violate fairness by allowing "parasitic" reliance on others' labor—a dynamic ' "real " rationale overlooks by equating non-work with rather than potential freeloading. Optimal taxation further critiques this by showing UBI's flat redistribution fails second-best , treating low-effort individuals equivalently to the involuntarily unemployed and ignoring brute differences in willingness to work, thus eroding the motivational basis for -based claims in . Such assumptions, while egalitarian in intent, risk anti-egalitarian outcomes by disincentivizing the very needed to sustain redistribution, as evidenced in models where unconditional schemes yield suboptimal welfare compared to conditional alternatives.

Economic and Fiscal Considerations

Funding Mechanisms and Revenue Requirements

Proponents of universal basic income (UBI) have proposed various funding mechanisms, primarily centered on new taxation schemes and the reconfiguration of existing government expenditures. These include value-added taxes (VAT), land value taxes (LVT), carbon taxes, and the replacement of means-tested welfare programs with UBI to achieve administrative savings, though the latter often fails to offset gross costs fully. For instance, a VAT has been suggested to capture revenue from consumption, with estimates indicating that a 22% rate could fund approximately $9,000 annually per U.S. adult, though lower rates like the 10% proposed in 2019 by political candidate would fall short of covering a $12,000 per year UBI without additional sources. LVT targets unearned land rents, potentially generating funds without distorting productive activity, as modeled in U.K. analyses where a 1% LVT could support a modest weekly payment while reducing . Carbon taxes, often framed as "dividends," leverage environmental externalities, with proposals estimating up to $1 trillion annually in U.S. revenue from excises on emissions and , though volatility in resource-based models like Alaska's Permanent Fund highlights implementation risks. Revenue requirements for UBI scale dramatically with the payment amount and population coverage. , a canonical UBI of $12,000 per year to every adult would necessitate approximately $3 trillion annually in gross expenditures, equivalent to about 75% of federal outlays and roughly double current federal tax revenues without offsetting cuts to programs like Social Security or . Net costs could be reduced to around $1.5 trillion by phasing out payments for higher earners or limiting to working-age adults (ages 18–64), but even these demand substantial tax hikes, such as broadened progressive income or wealth taxes, which face political and economic hurdles including reduced incentives for investment. In middle-income countries, simulations indicate 8–22% of GDP for a poverty-eradicating UBI, often requiring subsidy conversions or resource rents, while low-income settings could exceed 36–48% of GDP, rendering it fiscally prohibitive absent growth-enhancing reforms. Feasibility critiques emphasize that while targeted funding like subsidy rationalization (e.g., Iran's 2011 cash transfers replacing energy subsidies) shows partial viability, scaling to universal levels typically demands broad-based taxes that risk regressivity or evasion if reliant on narrow bases like top earners. Economic analyses underscore potential distortions, such as VAT-induced price increases disproportionately burdening low-income households unless rebated precisely, and the insufficiency of welfare consolidation alone, as universal payments extend benefits to non-poor recipients without equivalent clawbacks. Quantitative models suggest broad political support is essential, as solely via high marginal rates on elites yields insufficient and may erode labor supply, complicating long-term sustainability.

Projected Costs and Budgetary Sustainability

Projections for the costs of implementing universal basic income (UBI) in the typically range from $1.8 to $4 annually, depending on the proposed payment amount, eligibility criteria, and whether the program targets adults only or all residents. For instance, a UBI of $12,000 per year for every adult resident is estimated to cost approximately $3 gross annually, equivalent to about half of the federal budget or roughly 15% of U.S. GDP. Analyses from think tanks such as Third Way emphasize the fiscal strain, noting that a $12,000 annual UBI for adults aged 18-64 would cost about $2.4 trillion, requiring a 73% increase in federal revenue or substantial spending cuts, potentially diverting resources from programs like Social Security. Similarly, the George W. Bush Presidential Center highlights that a $10,000 annual UBI to every citizen would cost around $3 trillion, exceeding current social safety net spending and necessitating dramatic tax hikes or increased national debt, which could exacerbate fiscal pressures and risk inflation through deficit financing. These figures represent gross outlays before accounting for potential offsets such as the elimination of existing means-tested welfare programs like (SNAP) and (EITC), which total around $1 annually but cover far fewer recipients and provide lower average benefits. Net costs could be reduced through such replacements, but analyses indicate shortfalls persist for ambitious proposals. Charles Murray's 2016 plan for a $10,000 annual UBI to adults, paired with the abolition of most welfare programs and a flat , was projected to cost about $2.5 gross but yield net savings of up to $200 billion compared to 2014 welfare expenditures, assuming no behavioral changes like reduced work effort. Andrew Yang's "Freedom Dividend" of $1,000 monthly ($12,000 yearly) for adults was estimated at a gross cost of $2.8 , with proposed funding from a 10% (VAT) generating $800 billion to $1 , welfare consolidations saving $600 billion, and other efficiencies, though independent models suggest these offsets fall short by $1 or more annually without additional revenue measures.
ProposalAnnual AmountScopeGross Cost (USD, annual)Key Offsets ProposedSource
Hoynes & Rothstein Model$12,000Adults~$3 trillionNone specified (gross only)
UBI Center Estimate$12,000All residents~$4 trillionLimiting to adults reduces to $3.1T
Charles Murray (2016)$10,000Adults~$2.5 trillionReplace welfare programs
(2019)$12,000Adults~$2.8 trillionVAT, welfare cuts, efficiencies
Budgetary sustainability remains contentious among economists, as funding such programs would necessitate either unprecedented tax hikes—potentially a VAT of 20-30% or broad-based increases—or deficit financing amid already elevated federal levels exceeding $35 trillion in 2025. Dynamic models, such as those from the Wharton Model, project that a $6,000 annual UBI financed by progressive es could reduce long-term GDP by 5-10% due to labor supply disincentives and distortions, eroding the base and compounding fiscal pressures over time. Critics, including those from on and Policy Priorities, argue that universal payments inefficiently distribute funds to high-income households, inflating costs without proportional , and that partial offsets from welfare elimination overlook administrative savings and the value of targeted aid's work requirements. Proponents counter that economic multipliers from reduced and simplified administration could offset these, but empirical simulations in advanced economies show net fiscal deficits persisting unless paired with entitlement reforms like Social Security adjustments, which face political barriers. Overall, while small-scale or means-tested variants might prove viable, full UBI at poverty-alleviating levels strains budgetary realism given competing demands for defense, healthcare, and infrastructure.

Anticipated Effects on Inflation, Prices, and Growth

Economic models suggest that implementing a universal basic income (UBI) could generate inflationary pressures through elevated , particularly if the program expands fiscal deficits or fails to stimulate commensurate increases in productive output. The extent of depends on whether UBI spurs real sufficient to offset demand-side effects; without such growth, the influx of risks devaluing via excess chasing limited . Revenue-neutral UBI designs, which replace existing welfare expenditures, may mitigate net demand increases and thus dampen , though higher marginal rates required for funding could indirectly raise prices by distorting labor and investment incentives. A 2021 analysis of a $1,000 monthly UBI financed via consumption taxes projected long-term reductions in and output, implying potential supply constraints that exacerbate price rises. Conversely, some dynamic models anticipate muted inflationary effects if UBI enhances or reallocates resources more efficiently than means-tested systems. Anticipated impacts on prices mirror inflation dynamics, with demand-pull effects likely concentrating in consumer goods and if recipients prioritize spending over saving; reduced labor supply could further tighten supply chains, elevating costs in sectors reliant on low-wage workers. Empirical proxies, such as Alaska's Permanent Fund Dividend (PFD)—an annual oil-revenue-funded payment averaging $1,300 per resident from 1982 to 2023—have shown no sustained price spikes, with state rates tracking or below U.S. averages post-implementation, though the program's modest scale and non-tax funding limit generalizability to nationwide UBI. Regarding growth, macroeconomic simulations yield mixed projections: revenue-neutral UBI may boost short-term GDP via heightened consumption among low-income households, potentially increasing aggregates by streamlining transfers and reducing poverty traps. However, funding mechanisms involving broad-based taxes often model long-run output declines, as elevated effective tax rates discourage work and entrepreneurship; the Cleveland Fed study estimated a steady-state GDP reduction under consumption-tax-financed UBI due to diminished labor participation and capital formation. Critics, including analyses from conservative institutions, emphasize that UBI's substitution for conditional aid amplifies work disincentives embedded in transfer systems, potentially contracting overall economic expansion. Alaska's PFD experience indicates neutral to positive poverty alleviation without evident growth drag, but resource-specific funding insulates it from the incentive distortions of tax-backed national programs.

Labor and Incentive Effects

Impacts on Work Participation and Productivity

Empirical assessments of universal basic income (UBI) pilots and related programs have generally shown modest or negligible negative effects on work participation, with reductions in labor supply typically ranging from 1 to 2 hours per week among recipients, primarily affecting secondary earners rather than primary breadwinners. The U.S. (NIT) experiments conducted between 1968 and 1982, which provided guaranteed income with phase-outs akin to a partial UBI structure, revealed average work reductions of about 5% for wives and 3% overall, attributed to income and substitution effects encouraging or non-market activities, though primary male earners exhibited minimal responsiveness. These findings suggest that means-tested designs with implicit marginal rates exceeding 50% amplify disincentives compared to a flat-rate UBI, but even NIT effects were small in absolute terms, with no evidence of mass labor withdrawal. More recent pilots, such as Finland's 2017–2018 experiment delivering €560 monthly to 2,000 unemployed individuals, found no statistically significant decline in days or hours worked; recipients averaged 6 additional days of employment over two years relative to controls, potentially due to reduced administrative burdens and improved facilitating job search. Similarly, the Stockton Economic Empowerment Demonstration (2019–2021), providing $500 monthly to 125 low-income residents, increased full-time from 28% to 40% among participants, with shifts from unstable gig or part-time roles to stable jobs, indicating cash may enable better labor market navigation rather than idleness. In rural , GiveDirectly's unconditional cash transfers from 2013 onward boosted household assets and consumption without reducing overall labor supply; recipients often reallocated effort toward higher-productivity non-farm enterprises or , yielding sustained economic gains three years post-transfer. Alaska's Permanent Fund Dividend, an annual universal payment averaging $1,000–$2,000 per resident since funded by oil revenues, serves as a longer-term and shows no aggregate reduction in or labor force participation; it slightly increased part-time work by 17% but did not erode overall workforce engagement, consistent with low substitution effects at modest transfer levels. Systematic reviews of these and other studies conclude that UBI-like interventions rarely discourage work at scales observed, though effects may intensify with larger, permanent payments sufficient to cover living costs. Evidence on remains sparse and indirect, as most studies prioritize participation metrics over output per worker. In , transfers alleviated credit constraints, enabling investments that enhanced in labor allocation and raised local economic multipliers without evident declines in effort intensity. Theoretical concerns persist that unconditional income could soften incentives for skill acquisition or , potentially lowering marginal if labor supply contracts, but pilots like Stockton and report qualitative improvements in job quality and , which may indirectly support sustained output. Larger-scale implementations would be needed to assess macroeconomic impacts, as short-term pilots capture behavioral responses but not equilibrium shifts in wages or capital .

Potential for Dependency and Reduced Innovation

Critics of universal basic income (UBI) argue that unconditional cash transfers could foster dependency by diminishing the financial necessity of employment, potentially eroding work incentives and social structures that emphasize productive engagement, leading to reduced labor force participation over time. Economic theory posits that UBI introduces a pure effect, whereby recipients feel less compelled to work since are met without effort, unlike conditional welfare programs that include substitution effects from phase-outs. from (NIT) experiments in the United States during the 1970s, which approximated UBI-like structures, indicated labor supply reductions of approximately 5-17% among secondary earners such as wives and youth, though primary earners showed minimal changes. More recent pilots reinforce concerns about modest disincentives. In Finland's 2017-2018 UBI trial, providing €560 monthly to 2,000 unemployed individuals resulted in no significant increase in and a slight decline in days worked compared to the control group, suggesting limited re-entry into the . Similarly, analyses of Alaska's Permanent Fund , an annual unconditional payment averaging $1,000-2,000 per resident since 1982, have found small negative effects on , particularly among prime-age men, with reductions of 1-2% in labor force participation attributed to the income effect. In developing contexts, such as GiveDirectly's programs in , recipients exhibited reduced labor supply in and , with some studies noting up to 5% drops in work hours, raising fears of entrenched dependency in the absence of work requirements. Long-term dependency risks are amplified in high-welfare environments, where empirical reviews indicate that generous unconditional support correlates with persistently lower rates, as observed in European nations with expansive social safety nets. A 2025 simulation study estimated that full UBI implementation could yield efficiency losses through labor supply contractions of 5-10%, offsetting reductions and straining fiscal sustainability. Critics, including economists wary of behavioral responses, contend that without countervailing cultural or policy incentives, UBI might normalize non-work, eroding the of evidenced in labor market recoveries post-reform in welfare-to-work transitions like the 1996 U.S. reforms. Regarding innovation, UBI proponents claim it liberates individuals for creative pursuits, but detractors highlight potential stagnation from blunted incentives for risk-taking and . Theoretical frameworks suggest that guaranteed income reduces the of entrepreneurial effort, as the of diminishes, potentially diverting talent from high-innovation sectors toward or low- activities. A 2023 analysis posited that UBI alters the entrepreneurial environment by lowering returns to investment, with simulations indicating reduced startup rates if transfers exceed 20-30% of , drawing parallels to observed declines in patenting and firm formation in high-transfer regions. Empirical proxies from programs show mixed but concerning patterns: in Iran's 2011 subsidy reform akin to UBI, labor supply fell while informal dipped, implying less dynamic ecosystems. Economists like those at the Economic Strategy Group argue UBI undermines by reallocating resources inefficiently, as historical evidence from unconditional aid links it to slower technological adoption compared to targeted incentives.

Comparisons to Work-Conditioned Alternatives

Work-conditioned alternatives to universal basic income (UBI) include means-tested welfare programs, such as (TANF) and (SNAP) in the United States, which tie benefits to income thresholds and often require work or job-search compliance, as well as refundable tax credits like the (EITC), which subsidize earnings for low-income workers but phase out at higher incomes. These mechanisms aim to target aid to the needy while incentivizing employment, but they frequently generate high effective marginal tax rates (EMTRs) through benefit phase-outs, where additional earnings trigger disproportionate losses in support. For instance, low-income households combining multiple programs can face EMTRs exceeding 70%, and in some cases over 100%, creating "benefit cliffs" that discourage work advancement as the net gain from higher pay diminishes or reverses. UBI, by providing unconditional payments without phase-outs, eliminates these traps, potentially enabling smoother transitions into employment, though it replaces targeted aid with universal distribution, diluting efficiency for the poorest. Empirical evidence from negative income tax (NIT) trials in the 1970s, which resembled a UBI with a phase-out akin to work-conditioned systems, indicated modest labor supply reductions—primarily among secondary earners like spouses—while means-tested programs like Aid to Families with Dependent Children (AFDC) showed stronger disincentives due to abrupt cliffs. In contrast, the EITC, introduced in 1975 and expanded significantly since, has boosted rates, particularly among single mothers, by up to 7-10 percentage points through its earnings structure, though its phase-out still imposes EMTRs of 21.06% for families with two children as of 2023. Quantitative models comparing EITC and UBI suggest both can encourage low-income labor participation, but EITC does so more directly via work subsidies, while UBI may reduce hours worked among some groups due to lessened financial pressure, with heterogeneous agent simulations showing UBI yielding smaller output gains in dynamic economies. Administrative burdens further differentiate the approaches: means-tested and conditional programs entail high verification costs for eligibility, reporting, and compliance monitoring, often comprising 10-20% of expenditures in systems like U.S. welfare bundles, whereas UBI's universality leverages existing for distribution at 1-2% of total outlays. This simplicity reduces fraud and stigma associated with conditional aid, but critics argue it forgoes the precision of targeting, potentially diverting resources from the most vulnerable; for example, replacing means-tested transfers with UBI could increase total costs by 20-50% without equivalent if not calibrated to match net transfers to the poor.
AspectWork-Conditioned Alternatives (e.g., EITC, Means-Tested Welfare)Universal Basic Income
Incentive StructureSubsidizes work (EITC) but creates phase-out cliffs (EMTRs up to 100%+ in combinations)Unconditional; avoids cliffs but income-funded taxes impose flat EMTRs across board
Labor EffectsIncreases participation (EITC: +7-10% for single mothers); traps limit advancementModest reductions in hours (NIT trials: 5-10% for some); enables flexibility
Administrative CostsHigh (10-20% for verification/compliance)Low (1-2% via tax systems)
Targeting EfficiencyHigh for poor but exclusion errors and stigmaUniversal; inclusion but leakage to non-poor
Overall, while work-conditioned programs like EITC demonstrate stronger empirical boosts to via positive incentives, UBI addresses systemic disincentives from cliffs and , though its broader application risks fiscal strain without offsetting efficiencies in labor markets. Trade-offs hinge on societal priorities: conditional aid preserves work norms but perpetuates traps, whereas UBI prioritizes at the expense of conditional enforcement.

Empirical Assessments

Pre-1980s Experiments and Negative Income Tax Trials

The (NIT), a policy mechanism providing cash supplements to families below a designated threshold while gradually reducing benefits as earnings rise, served as a key precursor to universal basic income concepts by aiming to simplify welfare delivery and address without categorical restrictions. In the late 1960s and early 1970s, amid debates over , the U.S. government funded four large-scale randomized controlled trials to evaluate NIT's impacts, particularly on labor supply—a central concern given fears of work disincentives. These experiments, conducted by of Economic Opportunity and later the Department of Health and , involved assigning eligible low-income households to treatment groups receiving varying guarantee levels and phase-out tax rates (typically 50-70%) or control groups without supplements. The Income Maintenance Experiment, launched in 1968 and running through 1972, targeted urban and suburban families in and , enrolling 1,357 households with incomes below 150% of the poverty line. It tested guarantee levels up to $3,000 annually (in 1968 dollars) for a family of four and tax rates of 50-70%, finding modest labor supply reductions: secondary earners, particularly wives, cut hours by approximately 10-20%, while primary earners (husbands) showed negligible declines of under 5%. Youth participation in the decreased, though offset by increased school enrollment. Subsequent trials built on these designs. The Gary Income Maintenance Experiment (1971-1974) focused on 1,780 urban African American families in , yielding similar results with wives reducing work effort by 15-25% and minimal effects on male heads. The Rural Income Maintenance Experiment (1969-1973), involving 809 families in and , confirmed patterns of reduced female labor supply (around 15%) amid rural economic contexts, with no significant disruptions to overall family earnings stability. The largest effort, the Seattle-Denver Income Maintenance Experiment (SIME/DIME, 1971-1982), randomized 4,800 families across those cities and included longer-duration treatments (3-5 years) and job training components; it reported average second-year reductions of 9% in husbands' hours, 20% for wives, 14% for female heads, and 24% for youth, with cumulative effects growing over time but reverting post-treatment. Across all U.S. trials, overall labor supply fell by 5-15%, primarily among non-primary workers, offsetting 40-60% of transfer costs through forgone earnings and taxes; marital dissolution rates showed no consistent increase, though initial analyses suggested minor elevations in some subgroups. In , the Manitoba Basic Annual Income Experiment (, 1974-1979) provided a NIT-like guarantee to about 1,300 households in rural areas and a saturation site in Dauphin, testing benefits up to CAD $9,720 annually (1974 dollars) for a of four, phasing out at 50%. Labor supply effects mirrored U.S. findings, with women in two-parent households reducing hours by 5-10%—mainly via shorter workweeks or exits for childcare—while single mothers increased participation; overall work reductions were modest, accompanied by health gains like fewer hospitalizations, but the experiment's abrupt end limited full analysis. These pre-1980s trials, despite their means-tested nature differing from pure UBI, demonstrated NIT's feasibility in delivery but highlighted persistent, albeit small, work disincentives that influenced policy debates, contributing to the failure of proposals like President Nixon's . Methodological strengths included minimizing , though short durations and self-reported data introduced potential underreporting of earnings reductions.

2000s–2010s Pilots and Their Outcomes

In Namibia, the Otjivero-Omitara Basic Income Grant (BIG) pilot provided 100 Namibian dollars (approximately US$13 at the time) monthly to all residents aged 21-59 from January 2008 to December 2009, targeting a community of about 1,000 people in a poverty-stricken rural area. Outcomes included significant reductions in poverty, with per capita income rising and child malnutrition dropping sharply; school attendance increased, particularly among girls, and healthcare visits rose due to improved access. Economic activity expanded, as evidenced by more small businesses and livestock ownership, while crime rates fell and women's economic dependency on men decreased. Employment participation saw modest increases in waged and self-employment, countering fears of work disincentives, though the pilot's small scale and termination limited long-term assessment. India's pilot, conducted by the Self-Employed Women's Association (SEWA) from 2010 to 2013, delivered unconditional cash transfers of 200-300 rupees monthly (about $4-6) to roughly 8,000 individuals across 20 villages, including adults, children, and elderly. Recipients experienced improved and outcomes, such as fewer illnesses and better weight-for-age metrics in children, alongside higher school enrollment and . flourished, with notable shifts among women from low-wage labor to in farming and , leading to gains in household assets like and appliances; total earned income rose due to increased work effort in non-wage activities. Savings rates improved, and debt levels declined, though the program's rural focus and modest amounts constrained generalizability to urban or national scales. Iran's 2011 nationwide cash transfer program, enacted to replace energy subsidies, distributed unconditional monthly payments equivalent to about 29% of median household income (roughly US$40 per person initially) to nearly all citizens, functioning as a large-scale quasi-UBI. Labor supply effects were minimal, with studies finding no substantial reduction in overall employment or hours worked, though some subgroups like low-skilled men showed slight decreases offset by increases elsewhere. Poverty rates initially fell, but subsequent inflation eroded real transfer values, diminishing poverty alleviation by about 40% over time; the program's universality avoided targeting errors but strained fiscal resources amid oil price volatility. Finland's 2017-2018 basic income experiment selected 2,000 individuals aged 25-58 to receive 560 euros monthly, replacing existing benefits without conditions, while a control group of 173,000 followed standard support. Employment outcomes showed no statistically significant increase in days worked or earned compared to controls, with treatment group averages slightly higher by 6-11 days over two years but within margins of error. Participants reported higher , reduced mental strain, and perceived economic security, alongside simplified , though the pilot's restriction to non-employed recipients and short duration limited insights into broader labor market dynamics.

2020s Developments, Including AI-Driven Proposals and Recent Pilots

In the early 2020s, advancements in , including toward artificial general intelligence (AGI) and artificial superintelligence (ASI), intensified discussions on universal basic income as a response to anticipated widespread unemployment from AI automation. Proponents including CEO argued that AI-driven productivity gains could generate sufficient wealth to fund unconditional cash transfers via government taxation of AI sectors, potentially transitioning society toward a "universal high income" model where supplants human labor and serves as a bridge to post-scarcity economies. Tesla and CEO similarly endorsed UBI, stating in 2023 interviews that AI would render most jobs obsolete, necessitating a baseline income to maintain social stability amid abundance created by machines rather than human effort. These proposals diverged from traditional welfare by emphasizing AI's role in , such as through taxes on automated production, though critics noted that for AI-induced mass remains speculative and unproven at scale. Altman's advocacy included direct funding for ; in , results from a large-scale study he supported via OpenResearch revealed that $1,000 monthly payments to over 3,000 low-income U.S. recipients reduced by improving and , while slightly decreasing full-time by about 2 percentage points but increasing and part-time work. The study, spanning 2019–2023 with data analyzed in , found recipients prioritized essentials like and , with no evidence of widespread or luxury spending, challenging assumptions of work disincentives but highlighting concerns due to its targeted, temporary design. reiterated support in 2025, framing UBI as essential for a post-labor where AI handles "mundane" tasks, potentially funded by taxing AI-generated value rather than labor income. Recent pilots in the , often termed "guaranteed income" programs, proliferated in U.S. cities amid post-COVID economic recovery, though most were targeted at low-income or vulnerable groups rather than universal. By mid-2025, over 60 active pilots operated nationwide, with evaluations showing recipients used funds primarily for necessities, leading to improved and reduced debt but persistent housing affordability issues in high-cost areas. For instance, programs in and , launched around 2022–2023, provided $500–$1,000 monthly to formerly incarcerated individuals or families in , resulting in higher stability and lower rates compared to controls, per preliminary assessments. A multi-city evaluation indicated that while work hours dipped modestly (e.g., 1–5% reduction), overall labor participation held steady, with funds enabling job searches or training rather than idleness. Internationally, pilots echoed these patterns; a 2023–2025 trial in , extended to broader low-income households, demonstrated sustained benefits in child welfare and parental employment without inflating local prices, based on administrative data tracked through 2025. However, systemic challenges persisted, including funding reliance on or temporary grants rather than sustainable taxes, and debates over whether short-term pilots (typically 12–24 months) accurately predict long-term behavioral shifts or inflationary pressures from scaled implementation. These experiments, while informing AI-era proposals, underscored empirical gaps in universality, with no nationwide UBI policy enacted by October 2025 despite heightened advocacy.

Historical Evolution

Ancient and Early Modern Precursors

In ancient during the fifth and fourth centuries BCE, revenues from state-owned silver mines at Laurion funded the theorika, periodic cash distributions to male citizens that subsidized attendance at dramatic festivals and, in some periods, served as broader public payouts equivalent to a day's . These payments, drawn from natural resource extraction, represented an early mechanism for sharing public wealth unconditionally among eligible recipients, though restricted to a minority of the population excluding women, slaves, and metics. Early modern precursors shifted toward systematic welfare amid urbanization and enclosure of commons, but unconditional universality remained rare until the late eighteenth century. In 1526, humanist Juan Luis Vives outlined in De Subventione Pauperum a municipal system for poor relief in Bruges, calling for public registries, investigations of need, and aid including shelter and work for the able-bodied while providing for the infirm, orphans, and elderly; this influenced Elizabethan Poor Laws but tied assistance to moral and labor conditions rather than universality. Vives' framework emphasized pragmatic prevention of vagrancy and crime through state-organized charity over ecclesiastical alms, marking a transition from ad hoc benevolence to institutionalized support. More explicitly UBI-like proposals arose in the 1790s amid revolutionary fervor and land debates. Thomas Paine's 1797 pamphlet advocated a national fund, raised via a 10% on and transfers, to grant every person £15 upon reaching age 21 and an annual £10 from age 50, framing it as compensation for civilization's of common lands that denied natural inheritance rights. Paine estimated the scheme's cost at under £6.5 million annually, fundable without burdening labor, and intended it as a universal right applicable even to the wealthy, though as lump sums rather than regular stipends. Contemporaneously, radical proposed in The Rights of Infants (1797) and earlier works that parishes nationalize land rents—collecting them via elected "parish parliaments"—and distribute proceeds equally as a regular, unconditional income to all residents, irrespective of work or wealth, to end and enclosure-induced dispossession. Spence's local "national rent" model, rooted in communal land stewardship, aimed for self-sufficiency through and , prefiguring resource dividend concepts while critiquing concentration. These late Enlightenment ideas, emphasizing land value as a common endowment, laid groundwork for later UBI advocacy without reliance on means-testing or labor mandates.

19th–Mid-20th Century Proposals

In 1848, Belgian socialist Joseph Charlier proposed a "territorial dividend" in his treatise Solution du problème social, advocating for an unconditional quarterly or monthly payment to every citizen derived from the rental value of all , calculated annually to cover without means-testing or work requirements. This scheme aimed to resolve social inequalities by socializing land rents while preserving ownership, predating similar dividend concepts in modern basic income discussions. By the early 20th century, support for unconditional income guarantees gained traction amid post-World War I economic disruptions. In 1918, philosopher outlined in Roads to Freedom a universal payment "sufficient for necessaries" to all individuals, rendering work optional and supplemented by higher earnings for productive labor, as part of a blend of socialist and anarchist principles to foster personal freedom. That same year, engineer Dennis Milner and his wife Mabel published Scheme for a State Bonus, proposing a weekly "state bonus" equivalent to about 20% of national output, distributed to all British citizens to combat and stimulate production without altering existing welfare or taxes. Milner's plan, debated at the 1920 , emphasized national productivity gains but faced rejection due to fiscal concerns. In the 1920s and , further variants emerged within and guild socialist circles. Engineer Clifford Douglas, in 1924, advocated a "national dividend" paid monthly to all households under his theory, intended to distribute and counter industrial by bridging the gap between wages and total output prices. By 1935, economist proposed a "social dividend" in Principles of , framing it as a universal share of society's inherited productive capacity, with additional from current labor to promote and equity. Similarly, James in his 1935 policy outline endorsed a social dividend funded by state-owned assets, positioning it as essential for efficient and justice in a . These interwar ideas reflected growing intellectual interest in decoupling from amid technological fears, though none advanced to implementation.

Late 20th–Early 21st Century Advocacy

In the early 1980s, Belgian philosopher developed the concept of basic income as a response to rising and the limitations of traditional welfare systems, viewing it as a mechanism to guarantee "real freedom" by providing individuals with the resources to pursue their preferred activities without coercive labor requirements. Van Parijs argued that an unconditional income floor would enable genuine choice in and personal endeavors, contrasting it with means-tested benefits that distort incentives and create poverty traps. This European resurgence culminated in the founding of the Basic Income European Network (BIEN) in 1986 by Van Parijs and collaborators, which aimed to foster international discussion and research on unconditional basic income as a policy alternative to conditional welfare programs. BIEN's early conferences, starting in , , in 1986, brought together academics and policymakers to debate implementation models, emphasizing basic income's potential to reduce administrative costs and eliminate work disincentives inherent in existing social assistance schemes. Van Parijs further elaborated his advocacy in the 1995 book Real Freedom for All: The Basic Income Floor and Job Quotas, positing that basic income, financed through taxation on unearned assets and inheritance, would address inequality while preserving market efficiencies, though critics noted its reliance on optimistic revenue assumptions amid fiscal constraints. In parallel, during the late and , similar ideas gained traction among leftist intellectuals in , who saw basic income as a tool for decommodifying labor and countering neoliberal , despite limited empirical backing from contemporaneous trials. Entering the early 21st century, American political scientist Charles Murray revived UBI advocacy in the United States with his 2006 book In Our Hands: A Plan to Replace the Welfare State, proposing a $10,000 annual cash grant to every citizen aged 21 and older, funded by abolishing federal welfare programs including Social Security, Medicare, and Medicaid. Murray contended that this replacement would dismantle bureaucratic inefficiencies, empower personal responsibility, and mitigate work disincentives observed in conditional aid, estimating administrative savings of over $400 billion annually while providing a higher effective income to the poor. His plan included a phase-out for higher earners via a flat tax, aiming to simplify the tax code and reduce government paternalism, though it faced opposition for potentially underfunding healthcare needs among the vulnerable. Murray's proposal marked a conservative pivot toward UBI as a market-oriented , diverging from earlier progressive framings by prioritizing fiscal consolidation over expanded entitlements, and it influenced subsequent debates on welfare simplification amid growing concerns over entitlement spending projected to exceed 10% of GDP by 2010. Meanwhile, networks like the U.S. Basic Income Guarantee (BIG) group, established in the late , bridged academic and policy circles, hosting annual conferences to evaluate basic income's feasibility against alternatives like the . These efforts, however, yielded no major legislative advances by 2010, constrained by partisan divides and regarding long-term labor supply effects.

Partial Implementations and Analogous Policies

Resource Dividend Models like Alaska's Permanent Fund

The Alaska Permanent Fund was established in 1976 through a constitutional amendment to preserve a portion of the state's oil and gas revenues for future generations, with the inaugural deposit occurring in 1977. The associated Permanent Fund Dividend (PFD) program began distributing payments in 1982, initially funded by surplus oil revenues before transitioning to earnings from the Fund's investments, which now total over $80 billion as of 2024. These dividends represent an unconditional cash transfer to eligible Alaska residents—requiring one year of residency and 90 days in the state prior to application—typically ranging from $1,000 to $2,000 per person annually, with the 2023 payout at $1,312 and the 2024 amount reduced to $1,702 due to statutory formula adjustments amid budget constraints. The Fund's structure allocates at least 25% of mineral lease royalties and royalties to principal, invests them conservatively (primarily in stocks, bonds, and real estate), and distributes a portion of net income—historically around 5-7% of the Fund's value—via the PFD to avoid depleting the corpus. This resource dividend model functions as a partial, resource-backed analog to universal basic income by providing recurrent, non-means-tested payments derived from collective wealth rather than broad taxation, aiming to equitably share Alaska's windfall. Empirical analyses indicate the PFD has reduced state rates by approximately 2.3 s on average since inception, with one study estimating a 20-40% decline in the number of residents below the U.S. through direct income supplementation and indirect economic multipliers. On labor markets, rigorous studies using synthetic control methods and find no significant disemployment effects; instead, the dividend correlates with a modest 1.8 increase in part-time work (a 17% relative rise) but no change in overall or total hours worked, countering concerns of work disincentives in unconditional transfers. Economic injections from PFD distributions have also generated ancillary jobs—estimated at around 5,000 in support sectors—and boosted by hundreds of millions annually in early years, though payouts' volatility tied to oil prices introduces fiscal . Beyond Alaska, resource dividend models inspired by this framework have been proposed for other extractive economies, such as adapting sovereign wealth funds in African nations to distribute oil or mineral revenues directly to citizens, potentially alleviating while curbing of rents. However, implementations remain rare; variants like Norway's Government Pension Fund Global prioritize intergenerational savings over per-capita dividends, forgoing regular citizen payouts in favor of broader public spending. Critics note that Alaska's model sustains only modest transfers relative to full UBI thresholds (e.g., averaging under $2,000 yearly versus proposed national UBI levels of $12,000+), depends on depletable non-renewable resources, and has shown mixed inequality effects, with some econometric evidence of short- and long-term widening of income gaps due to differential saving behaviors across income strata. Despite these limits, the PFD demonstrates a viable mechanism for resource-backed redistribution without evident labor supply distortions, informing debates on scaling similar dividends from land rents or carbon fees in non-resource contexts.

Targeted Transfers and Their Relation to UBI

Targeted transfers refer to programs that provide financial assistance based on specific criteria such as levels, assets, or household needs, aiming to direct resources primarily to low-income populations. Examples in the United States include the (SNAP), [Temporary Assistance for Needy Families](/page/Temporary Assistance for Needy Families) (TANF), and the Earned Income Tax Credit (EITC), which collectively served over 80 million individuals in 2023 with expenditures exceeding $1 trillion annually across federal means-tested programs. These programs seek to maximize anti-poverty impact by concentrating aid where it is most needed, theoretically achieving greater efficiency per dollar spent compared to universal distributions. However, targeted transfers incur substantial administrative costs due to the need for ongoing eligibility verification, income reporting, and prevention, often amounting to 5-10% of program budgets in the U.S. welfare system. Means-testing also generates "benefit cliffs," where small increases in trigger sharp reductions in , creating effective marginal rates exceeding 100% and trapping recipients in by discouraging additional work or savings. Empirical analyses, such as a 2014 study across U.S. states, identified such cliffs in 34 states that deterred by making lower for working households compared to non-working ones. The 1968-1982 (NIT) experiments in the U.S. and , which tested a targeted with phase-outs similar to modern transfers, provide key evidence on behavioral responses: secondary earners reduced work hours by 10-20%, while overall labor supply fell modestly by about 2.4%, with effects concentrated among wives and youth rather than primary breadwinners. These findings highlight causal disincentives from guarantees tied to low earnings, though the experiments' scale—guarantees up to 140% of lines in some sites—amplified responses beyond typical programs. In relation to universal basic income (UBI), targeted transfers represent a primary alternative framework, with UBI advocates arguing that universality eliminates administrative overhead and phase-out distortions, potentially simplifying welfare delivery and boosting labor participation by avoiding cliffs. NBER contrasts the two, noting that while targeted programs reduce more precisely in low-leakage settings, UBI minimizes exclusion errors (failing to reach eligible poor due to or stigma) and behavioral drags, as evidenced by lower work reductions in universal pilots versus means-tested analogs. Critics, including analyses from developing-country contexts like and , counter that UBI's universality dilutes fiscal efficiency, delivering aid to non-poor households and requiring higher overall spending—e.g., a $10,000 U.S. UBI would cost $3.28 trillion yearly—without proportionally greater alleviation per dollar. Proponents of replacement strategies propose folding targeted programs into a UBI to cut redundancy, but empirical tradeoffs persist: targeted systems excel in concentrated redistribution yet suffer from higher deadweight losses via disincentives, while UBI's flat structure risks under-targeting acute needs unless paired with supplements.

International Examples of Conditional Cash Programs

One prominent example is Mexico's Progresa program, launched in 1997 and later renamed and then Prospera, which provided payments to poor rural households conditional on children's school enrollment, regular health check-ups, and nutritional monitoring. By 2014, the program reached nearly six million families and demonstrated increases in school attendance by 20-30% for , improved rates, and higher birthweights (127.3 grams increase among beneficiaries), contributing to a 4.6 reduction in low birthweight incidence. Long-term evaluations showed sustained benefits, including higher , increased adult earnings (by up to 9.6% in agricultural ), and improved intergenerational mobility, with the model influencing similar initiatives in over 50 countries. Brazil's , introduced in 2003, consolidated prior fragmented programs into a nationwide scheme targeting low-income families, requiring school attendance (minimum 85% for children aged 6-15), health service utilization, and vaccinations. Covering about 14 million families by 2020, it reduced by 15-25% and the by 2-5 points through improved consumption and targeting efficiency, while boosting school enrollment by 4-6 percentage points and reducing child malnutrition rates. Peer-reviewed analyses also linked it to lower overall mortality (forecasted to avert 1.6 million deaths from 2004-2023) and decreased hospitalization rates, particularly for preventable conditions, though effects on adult labor supply were mixed with some of reduced formal among recipients. Other international implementations include Jamaica's Programme of Advancement Through Health and Education (PATH), started in 2008, which conditions transfers on attendance and visits for vulnerable households, yielding gains in primary enrollment (up to 10%) and nutritional outcomes among the poorest quintiles. In the , the (4Ps), rolled out from 2008, mirrors these designs and has increased completion by 7-10% and maternal check-up compliance, with cost-benefit ratios favoring investments over unconditional alternatives in resource-constrained settings. These programs generally outperform pure targeting without conditions in fostering verifiable behavioral changes, such as and investments, though administrative costs for monitoring compliance can reach 10-15% of transfers.

Reception and Debates

Key Advocates and Their Motivations

Economist proposed a (NIT) in his 1962 book , under which individuals below a certain income threshold would receive supplemental payments from the government, tapering off as earnings increase to preserve work incentives. His motivation centered on replacing the inefficient, bureaucratic U.S. welfare system—which he argued distorted incentives and trapped recipients in —with direct cash transfers that minimized administrative costs and government intrusion while targeting aid to the needy without means-testing complexities. Friedman viewed the NIT as a market-friendly alternative to expansive social programs, estimating it could save taxpayers significant administrative overhead compared to existing aid distributions. Civil rights leader Martin Luther King Jr. advocated for a guaranteed annual income in his 1967 book Where Do We Go from Here: Chaos or Community?, describing it as the "simplest and most effective" means to eradicate by providing direct cash to families alongside wages, dynamically adjusting with . King's rationale was rooted in addressing systemic economic deprivation, particularly among Black Americans, arguing that piecemeal welfare reforms failed to dismantle entrenched inequality and that unconditional support would foster dignity and opportunity without paternalistic conditions. He emphasized its role in the , linking it to broader demands for and housing, as a pragmatic response to automation's displacement of low-skill jobs and persistent racial wealth gaps. Philosopher has championed unconditional basic income since the 1980s, defining it as a regular, individual cash payment from the state without means or work tests, sufficient for basic needs but topped up by voluntary labor. His core motivation draws from a "real libertarian" ethic of justice, positing that basic income maximizes "real freedom" by granting everyone the resources to pursue diverse life paths—such as reduced work hours, , or caregiving—countering coercive labor markets and enabling ethical sharing of societal productivity gains. Van Parijs argues it addresses worklessness not through mandates but by decoupling survival from employment, critiquing left-wing as infringing on while rebutting right-wing concerns over idleness via from pilots showing sustained participation. Entrepreneur Andrew Yang popularized UBI during his 2020 U.S. presidential campaign via the "Freedom Dividend," a proposed $1,000 monthly payment to every adult citizen, funded partly by a on automation-driven industries. Yang's primary impetus was technological unemployment, forecasting that AI and robotics would eliminate one-third of U.S. jobs within 12 years, rendering traditional safety nets obsolete and necessitating proactive income security to avert social unrest and . He contended that UBI would stimulate , , and by providing a stable floor amid market disruptions, drawing on pilot data indicating reduced without significant work disincentives. Tech executive has repeatedly endorsed UBI since 2016, predicting its inevitability as AI supplants human labor across sectors, potentially rendering most jobs obsolete and requiring a "universal high income" to sustain society. Musk's advocacy stems from optimism about AI's productivity boom—via companies like Tesla and xAI—but realism about resultant mass displacement, arguing that without redistribution, abundance would exacerbate inequality and purposelessness, framing UBI as a transitional mechanism to redefine human value beyond wage work. He has cited global robotization trends, warning of fewer traditional roles while urging preparation through policy innovation.

Prominent Opponents and Counterarguments

, senior fellow at the Manhattan Institute, has argued that universal basic income (UBI) fails to resolve social divisions by devaluing work, which he views as essential for personal responsibility and community ties, while imposing fiscal costs that could necessitate distortive taxation or program cuts. , former U.S. Treasury Secretary, has opposed UBI-like policies for encouraging joblessness, asserting that human fulfillment derives primarily from productive rather than unconditional payments. explicitly rejected a full UBI, favoring means-tested safety nets to avoid broad disincentives and administrative overreach, as he believed universal payments could erode market-driven incentives without achieving . A primary counterargument centers on reduced labor supply, supported by empirical evidence from the U.S. (NIT) experiments conducted between 1968 and 1982 in cities including , and Seattle-Denver, where guaranteed income supplements led to average work hour reductions of 5-15%, particularly among secondary earners like wives (up to 20% drop) and , due to income effects outweighing substitution incentives. These findings indicate that unconditional cash transfers diminish the of additional earnings, potentially contracting the labor force and slowing , as modeled in dynamic analyses showing long-term earnings declines from earlier retirement and human capital underinvestment. Fiscal sustainability poses another core objection, with estimates for a U.S. UBI of $12,000 annually per exceeding $3 trillion yearly—roughly half the federal budget—requiring unprecedented hikes on labor and capital that could suppress and , as high marginal rates historically correlate with reduced output. Iran's 2011 universal cash transfer program, providing about 29% of household income monthly, illustrates real-world challenges: halved the transfers' real value within years, diminishing by approximately 40%, especially in rural areas, while failing to offset rising consumer prices without corresponding supply expansions. Critics further contend that UBI's universality wastes resources on non-needy recipients, including high earners, making it less efficient for alleviation than targeted transfers, which empirical comparisons show achieve greater per-dollar impact on low-income households without broad disincentives. This inefficiency, combined with risks of entrenched dependency—evident in prolonged welfare participation patterns—could foster , where recipients prioritize leisure over skill-building or , undermining the causal links between effort, , and societal prosperity observed in market economies. Some opponents advocate alternatives like a federal job guarantee, arguing it better preserves social purpose through productive employment while mitigating dependency risks associated with unconditional payments, as debated in outlets like Jacobin. A 2016 survey of leading economists found 58% opposing UBI, reflecting consensus on these trade-offs over proponents' unproven claims of minimal work effects from small-scale pilots.

Public Opinion, Polls, and Referendum Results

In national and referendums, proposals for universal basic income or related experiments have consistently been rejected by majorities. Switzerland's June 5, 2016, on introducing a guaranteed monthly income of 2,500 Swiss francs for adults and 625 for children resulted in 77% voting against and 23% in favor, with turnout at 46%. In the Swiss city of , a 2023 vote on a basic income saw 69% rejection. Hamburg's October 12, 2025, on testing unconditional basic income alongside climate measures passed the latter but rejected the UBI proposal. Public opinion polls reveal variable and often shallow support for UBI, influenced by question wording, details on or amount, and respondent demographics. Support frequently declines when costs, tax implications, or work disincentives are specified. , a 2020 Pew Research Center survey indicated 45% favored government-provided UBI for all adult citizens versus 49% opposed, with stronger backing among (54%) and (50%) adults than (38%) respondents; Democrats showed 66% favorability compared to 18% among Republicans. A 2019 Gallup poll found 43% American support overall. An August 2020 survey of registered voters reported 55% support and 45% opposition, though this preceded detailed cost discussions.
Country/RegionPoll SourceDateSupport Level
Pew ResearchAugust 202045% favor, 49% oppose
Gallup201943% support
Gallup201977% support
Gallup201975% support
European Union (select)YouGov EurotrackJuly 2022Majorities in (57%), (53%), (52%) expect improved
European attitudes show higher optimism in southern and some central , with a 2022 YouGov survey across seven nations finding pluralities or majorities anticipating quality-of-life gains from UBI, though outright adoption support varied. A European Social Survey analysis across 21 estimated 51% average support for introducing UBI. Globally, support correlates with economic disadvantage but remains contingent on implementation specifics, as evidenced by the UBI Center's tracking of over 30 polls showing wide fluctuations by framing and subgroup.

References

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