Universal Basic Income and the Reshaping of Democracy by Burkhard Wehner

Author:Burkhard Wehner
Language: eng
Format: epub
ISBN: 9783030058289
Publisher: Springer International Publishing

6.2 The Logic of Basic Income Studies

If pilot studies have provided little insight relevant to the politics of basic income, then the problem may lie with the method. This raises the question what, if any, further findings such studies may yield and whether or how better studies could be conceived. To this end, the general logic of such experiments should first be explored. Since many previous experiments centered on labor market behavior, the logic of such experiments should be given priority in this context.

In the Finnish basic income experiment, all test subjects were unemployed. This treatment group seemed appropriate because in the previous debate the behavior of the unemployed had played the most prominent role. Particular attention was therefore given to the questions of whether and how much the duration of individual unemployment would increase and whether and to what extent the labor supply would thereby be reduced. An implicit assumption apparently was that a percentage decline in labor supply would lead to a comparable percentage decline in economic output.

In such studies, the labor supply is usually measured in numbers of persons or in time units. This assumption, however, does not take into account how widely individual added value contributions of workers diverge. The potential added value contributions of the unemployed obviously generally lie substantially below the average. Thus, even if in a basic income system labor supply decreased to a certain extent, the percentage decrease in added value—and thereby in distributable income—would be significantly lower. Insofar, the question of how much and whether the basic income would affect labor supply—and in particular the duration of individual unemployment—is much less significant for the basic income debate than has been widely assumed in the past. The more relevant figure in this context would be changes in the supply of added value in the labor market. But such figures are of course much more difficult to determine by experiments.

It cannot be ruled out that the total added value would slightly decline in a basic income system, but it should be clear without results from pilot studies that such decline would be very moderate as long as the basic income were held on a politically sustainable level as outlined above. A plausible guess is that it could amount to at most three percent, thus equaling the effect of an economic growth break of less than two years. Such an effect should be a subordinate issue in the fundamental debate about a citizens’ stipend.

That the impact of basic income on the supply of labor and added value is often exaggerated also follows from another intuitively plausible consideration. In a well-conceived citizens’ stipend system, the great majority of people would want to earn the same net income as in the previous system. This claim should be beyond doubt without empirical proof. At least on average, in such a well-conceived citizens’ stipend system people would have to work for this income about as much as in the conventional system. This, too, suggests that a system change to a citizens’ stipend could affect the total supply of labor only minimally.

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