Lessons from basic income experiments

Since the 1970s, the developed countries have experimented basic income. The basic income experiment in rich countries have shown that governments and influential individuals are willing to view basic income, after a series of workfare reforms, as a second-generation solution to specific problems among working aged populations suffering from poverty. A great deal is known about the labour supply effects of basic income. Substitution effects are moderate and income effects are small. There are positive effect on family resources on education and health outcomes for children. Little is known about the long-term effect on, for example, childhood development, human capital investment and employment outcomes. It is obvious that poverty cannot be solved by cash transfers alone. Childcare, educational opportunities, housing, health and social services and employment services are needed. The experiments show that at least, some target groups were benefitting from participating in the activation measures. That emphasizes the role of personalized services for the long-term unemployed.