Two basic questions regarding any universal basic income experiment

A minimum income guaranteed by the government is a concept which is being widely discussed. In order to find sustainable answers to income inequality and other challenges, problems need to be clearly defined.

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Researchers from the INSEAD business school focused on an experiment conducted in Ontario, Canada. According to them, any further experiments should always start with two questions:

1. What problem is the basic income meant to solve?

  • To avoid social unrest?
  • To relieve pressure on public healthcare systems (since poverty is linked to poor health)?
  • Make entrepreneurship more of a fair playing field (as, for example, Mark Zuckerberg would like)?

However, if you want basic income to prevent future problems, there is a trap: today these problems don’t always feel so acute and thus people often don't even believe they exist.

2. What solutions are already in place?

  • Is there any existing assistance for low-income families?
  • What will be the actual impact on recipients’ lives?

You just need to be clear about the expected outcomes.

The Ontario experiment

One province of Canada tested a basic income scheme. It was aimed at reducing poverty and inequality.

The conditions were as follows:

  • No restrictions on how the money is spent
  • No routine monitoring by the authorities
  • Participants had to give up other social assistance programmes (although some health and housing benefits were allowed)

For employed participants, the monthly payment was reduced by half of their earned income.

The evaluation was also to be based on changes in the following aspects of participants’ lives:

  • Stress and anxiety
  • Health
  • Housing stability
  • Education

Abrupt end: what is the future?

In 2019, however, the experiment was prematurely cancelled by new legislators, who thought the scheme discouraged people from getting themselves back on track. Nevertheless, even some prominent business leaders (Bill Gates, Mark Zuckerberg and Elon Musk) have suggested some form of a universal basic income will soon become necessary.

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Article source INSEAD Knowledge - INSEAD Business School knowledge portal
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