Basic income: Insights from social experiments and simulations

The introduction of an unconditional basic income (UBI) has been a long-lasting debate in most of the modern welfare states. Although it has not yet been implemented anywhere it generates a lot of interest. Independent of its actual implementation, a UBI consists of the idea of a unitary social transfer to everyone in society, replacing many if not all existing transfers. This new transfer is no longer means tested. Hence, it is not subject to the household situation or even the willingness to work. The arguments for this include an increase in social justice, a reduction of poverty, and a raise in individual freedom. The arguments against focus mainly around the abandonment of the subsidiarity principle. Critics also fear that an unconditional payment would reduce labour market participation especially for low-income households. Furthermore, given the nature of a negative income tax scheme, full poverty extinction combined with high incentives to work could not be financed.