Imagine receiving a certain amount of money every month, regardless of your financial or social status.
This is precisely the essence of universal basic income, which has been debated around the world for years.
This concept has also been the subject of numerous social experiments.
In Germany, a non-profit organization based in Berlin My basic income (My Basic Income) followed 122 people over three years, who received an unconditional amount of $1.365 each month.
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The study showed that the willingness to work did not decline among the participants and all remained in full-time employment.
However, a significant number of them felt secure enough to change jobs.
Participants also reported greater job satisfaction and devoted more time to additional education.
Another large study is still being conducted in Kenya and is funded by another non-profit organization. GiveDirectly, shows similar results, although for now they are temporary.
In Kenya, residents of 295 villages in two districts receive payments over two to 12 years through mobile banking.
There was no decline in the overall labor supply, but a large number of participants left paid jobs to start their own businesses or become self-employed.
Some even pool their funds and take turns sharing the proceeds.
“The peace of mind that comes from knowing I won’t run out of meals is invaluable to me,” says Kadi, a widow with no steady income in Kenya.
She occasionally does manual labor and is a beneficiary of the program. GiveDirectly, from which he receives monthly payments of $34.
She says she relies completely on this money, which has become her "only reliable source of hope."
"This initiative gave me a sense of belonging and the opportunity to suddenly receive a larger sum of money than I could have imagined before."
"I plan to... buy oxen for plowing when the time comes."
The system may overlook or “ignore” those for whom aid is intended
How surprising are the results of these studies?
Not at all, says Kelly Howson, a senior researcher at the Institute for Economic Justice in South Africa.
"Any attempt to target people based on income inequality is doomed to failure," Dr Howson tells the BBC.
"We don't need more pilot projects to prove that receiving a universal basic income doesn't cause people to withdraw from the labor market."
"On the contrary, it enables them to start their own businesses and stimulate the development of local economies."
She explains that unlike a universal approach, any form of social assistance that is means-tested always overlooks or neglects a certain number of people who are simply not covered by such a program.
For example, in South Africa, receiving aid often depends on digital literacy, but around 20 percent of the population does not have access to the internet.
Users are also expected to have a smartphone with a quality camera to meet biometric identification requirements.
Because of this, many who would be eligible for financial assistance never receive it, says Dr. Hoson.
In India, citizens who have so-called "below poverty line" cards are entitled to government assistance, but research shows that about half of the poorest do not have such a card at all.
“Conducting a means test can be extremely difficult in an environment where people mostly work in the informal sector, are predominantly self-employed, and where there are no official records or income data.
“In such conditions, identifying the poor can be costly, corrupt, complicated, and contentious,” Professor Pranab Bardan of the University of California, Berkeley, wrote in a paper published on the World Economic Forum website in 2016.
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Money for everything?
Do the results of the experiment in Germany reflect those obtained in other parts of the world and is this concept accepted worldwide?
In recent years, several experiments have been conducted regarding universal basic income in developing countries.
These include the Indian state of Madhya Pradesh, villages in Namibia, and a national cash assistance program introduced in Iran in 2011 to cushion the effects of the elimination of food and fuel subsidies, according to a group of economists, including Nobel laureate Abhijit Banerjee, in a 2019 paper on the subject for the National Bureau of Economic Research (NBER).
From these widely varying examples, it is difficult to draw general conclusions, the authors point out.
However, it appears that cash donations have allowed beneficiaries a certain degree of flexibility.
In other words, users could spend money on what they needed most, whether it was food, infertility treatment, or contraceptives.
The positive effects of universal basic income are particularly visible in societies where there are large income disparities, says Kelly Howson.
And universal basic income is supported by different political camps.
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Leftists advocate universal basic income because of the belief that the right to income is a basic human right, and even right-wing libertarians support its introduction, although for different reasons, she says.
Proponents of this concept, including billionaire and political advisor Elon Musk, have previously argued that a universal basic income makes sense in order to maintain consumption levels in the face of increasing automation and the development of artificial intelligence.
“Universal basic income is a powerful tool for development,” says Hoson.
"The reasons for its application may vary depending on the context, but the essence of the argument is the same."
Hoson also points to other potential advantages of implementing a universal basic income.
In addition to data showing that it has a positive impact on mental and physical health, positive effects on education have also been documented, as children from families that receive these donations stay in school longer.
She also points out that women who participated in programs in Kenya and India reported a greater degree of autonomy, as they were no longer financially dependent on men in the household.
For some women, universal basic income has enabled them to leave abusive partners.
However, some argue that it is difficult to draw universal conclusions based on the experiment in Germany.
Professor Eva Vival from the University of Toronto, Canada, led research on universal basic income in two US states - Texas and Illinois.
There, participants received cash payments of $12.000 per year for three years, but they worked an average of 1,3 hours less per week and, unlike the results in Germany, their annual labor income was $1.500 lower.
"Lower-income countries show more pronounced positive effects, while higher-income countries show weaker results," Professor Eva Vival told the BBC.
"In our research, we saw that an increasing number of people are stopping working or reducing their working hours."
"This is just an assumption for now, but in countries where incomes are lower, people are much more limited by lack of money and any help has a greater impact."
"In wealthier environments, problems are often such that money alone can hardly solve them."
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And what about taxpayers?
Kelly Howson points out that there is still widespread belief in the world that universal basic income could create a "dependency syndrome" and that tax revenue sources, which will be decreasing, will be under increasing pressure to finance those who cannot, or perhaps do not want to, work.
Professor Flora Gill from the University of Sydney, Australia, is skeptical about universal basic income.
On the Transforming Society blog in 2023, she wrote: “If people want to work, they should be able to. Right now, that’s not the case.
"Before we introduce a universal basic income, we need to ensure this basic human right."
Professor Gil believes that the only way to finance a universal basic income, which in her opinion would be well below the amount sufficient for basic survival, would be a significant increase in taxes.
“Universal basic income would require a massive increase in tax revenues that are currently lacking in our economies,” she writes.
However, Dr. Howson believes that the effect of universal basic income is exactly the opposite.
"In South Africa, a huge number of people are excluded from the economy.
"The way to expand tax revenue sources is to first solve the problem of poverty and hunger, and to enable people to take the first step on the ladder of development."
"Then you can encourage people's creativity and entrepreneurship."
"People want to be more productive."
Far from being a burden on the state budget, universal basic income is returned to state coffers through consumption, value added tax (VAT), or the opening of new businesses.
“It is an investment in the future of the economy, not just a cost,” concludes Howson.
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Other concerns
Despite the potential, some researchers point out that there are still certain concerns regarding the introduction of a universal basic income.
For example, if people lose motivation to work, there may be a reduction in the workforce.
The second challenge is inflation.
Namely, the amount of money distributed in Iran through the universal cash transfer program introduced in 2011 was not adjusted for inflation, causing beneficiaries' real incomes to fall dramatically, while the cost of living rose sharply, according to a 2019 study by the National Bureau of Economic Research.
Experts warn that this concept could threaten social structures or social cohesion, which could lead to instability.
Ultimately, it all depends on how much governments value giving people choices and how much money they are willing to allocate to such a program, says Professor Vival.
"In the short term, universal basic income is unlikely to be politically feasible in high-income countries because it is very expensive," she points out.
“In lower-income countries, decision-makers are likely to prefer to invest in specific areas such as health and education.
"If these are priorities, then it is probably more effective to introduce programs that target those areas."
"Giving cash allows people to spend money in different ways and for different needs."
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