Category: Universal Basic Income

Across the globe, even in this great era of modern development and equality, there are still millions who live in impoverish conditions, and despite their hard labour they are still unable to earn enough income to support themselves and their families. These terrible living conditions can lead to malnutrition and even death by starvation in some cases.

However, there is a solution to these problems, the implementation of a universal basic income would drastically improve the lives of millions across the globe, giving them enough income to feed their families and have a higher quality of life. But firstly, how would the basic universal income work? The idea is that all adults will receive a payment to cover the basic costs of living, regardless of their wealth, employment status or class. The implementation of such a system should end poverty globally, and will allow the earth’s population to live in prosperity and have enough money to receive education.

This concept is not new either, it has been debated for a long time, but there have been little advances in implementing this system on a global scale. However, there have been some small-scale uses of this system to test its effectiveness. One such place where this has occurred is in Namibia, Africa. From January 2008 to December 2009, a basic income project was implemented by the Namibian Basic Income Grant Coalition, and the system was implemented into the two villages of Otjievero and Omitara. All adults in the two villages were given the equivalent of 12 US dollars, and despite it being a seemingly low amount, it had a huge impact on the villages. It was found that malnutrition rates had fallen, school attendance rates has risen and that the community’s income had risen significantly and had become greater than the amount that had been given to them as part of the scheme. This is as the money gave the villagers more money to partake in economic activities and to enterprise to make more money. It was also found that overall crime rates had fallen by 42%, that stock theft had fallen by 43% and that other theft had fallen by just under 20%. This is a prime example of the positive externalities that can occur as a result of a universal basic income, as it will allow the quality of life of the people affected to increase exponentially, resulting in economic growth as a result of increased economic activity, as well as a decrease in negative externalities such as theft as people are no longer forced into crime by their low incomes.

However, despite the seemingly only positive results, there is data to suggest otherwise. Data collected by economist Milton Friedman from pilot schemes in Seattle, Denver and Indiana in the late 1960s to early 1970s showed that the introduction of a basic universal income in these areas lead to a 17% reduction in work effort from men, as well as a 9% reduction in work effort from women, suggesting that the implementation of a universal basic income would lead to a drastic decrease in the output of certain economies as people would rely on the income from the basic income as oppose to working harder in order to earn more. This could lead to major negative externalities, such as a fall in GDP as less goods are produced and sold, as well as unemployment as producers lay off workers due to the fall in demand for consumer goods as less is produced.

Despite the potential economic costs of a universal basic income, a study conducted in Manitoba, Canada from 1974 to 1979 concluded that the introduction of a basic income lead to huge improvements in both the mental and physical health of the population, as it was found that there was an 8.5% drop in hospital visits, fewer emergency room visits fewer incidents of work related injuries and accidents. As well as this, fewer patients were admitted to psychiatric hospitals and there were less reported cases of mental illness. This improvement in health could benefit governments substantially, as less would be spent on health services and so it could be invested elsewhere.

To conclude, whilst I believe that the implementation of a universal basic income would not be a good idea, as it has been proven to have to negative economic effects when tested in certain areas, I believe that an increase in the amount of small scale projects implementing basic incomes to certain areas would be more beneficial to the world, as it appears that some areas have benefitted to a much greater extent than others where this system has been tested, such as in Namibia and Canada, where the positive impacts of a basic income have been huge.

Estonia is a small but developed country, with a population of 1.3 million, located in Northern Europe. Its high-income economy is often referred to as the fastest growing in the EU. In addition to that, Estonian citizens obtain the free education and universal health care. On the international market, the country stands out for its I.T. advancements. In 2005, Estonia became the first state in the world to hold elections over the internet, and in 2014, the first to provide e-residency. In terms of earnings, 29% of Estonian citizens either earn a minimum wage of 584€ (2020) or less than that. Therefore, those citizens do not work for a decent level of life but rather for survival. With all of that being said, there are factors that would support the idea of Universal Basic Income, if it were to be accepted in Estonia. The factors being, poverty and unemployment, and the current COVID-19 pandemic.

The input of Universal Basic Income (UBI) would make a great change in the members of lower class. Nowadays, people earning minimum wage, find themselves in a survival situation for providing food and a place to live for themselves and/or their families. It has a direct effect on their psychological state because such a person always remains under stress. UBI would provide a base for lower-class families. Indeed, they would not only stop worrying about the next day, but it would also provide them with better opportunities for the future. For instance, they could ensure all the vital needs for their children, such as clothes and school supplies by devoting more money to them as well as offering a higher level of education. From a political perspective, people would want to be more involved with their government. A country where the level of life of citizens is high is a blooming country. Thievery in Estonia would decrease as well. The statistics of the Estonian Ministry of Justice show, that in 2017, 1022 cases of crimes were registered by the underage people. The majority of those cases were small thefts, where teenagers were trying to steal to earn some money that the parents could not afford to give to them. UBI would solve this problem because as mentioned previously, parents will be able to invest more in their children. As parents would have more financial resources, they will be able to give their children a prospect for development such as, extracurricular activities and hobbies that would guarantee them a life where they would be able to develop as people rather than involving themselves in criminal activities. It would develop their intelligence, physical health, and soul. UBI would affect the economy as well. The Unconditional Basic Income means that enterprise would be financed by Estonian public sector through citizens. Those enterprises provide goods and services that are essential to a society as people could not live in dignity and participate in the economy without. Those including food production, clothing industry, telecommunication services, services related to housings and transport. Meaning, that instead of going straight to enterprises, taxes and salaries, money in the national economy would beforehand stop in the citizens’ back accounts before continuing to the rest. Once people will be financially stable, they will not be stressed out and will have more interest in different subjects that will, therefore, help the country by decreasing criminal activities and developing people’s interest.

Since January, the pandemic of coronavirus has affected the whole world. Although being a small country, as of today (3.04), there are already 1018 cases of coronavirus in Estonia. During this period, many people have lost their jobs or have seen their salaries decrease. The stress levels of the citizens are very high and with the possibility of losing their jobs and/or money, it adds even more stress up. Many small and medium enterprises have no support from the government, and they have no choice but to struggle alone during the crisis. If UBI policy was to be adopted in Estonia during today’s pandemic, it would have a great effect on the country. With the money provided to people, it could save jobs and once the crisis is over, not search for a new job but continue working. The stress would go down as well because people would know that they have full support from the government, thus contributing positively on their mental health as well. As mentioned previously, education is free in Estonia, including the food. With the closing of the educational institutions, children, whose parents cannot afford nutritious food, lose the benefits of free breakfasts and lunch, given to them 5 times a week. As food provided by the government is not available anymore, families are forced to spend even more money. Universal Basic Income would give those families an opportunity, during the pandemic, to be able to offer all the necessary in those hard times.

Universal Basic Income can be a plausible solution for Estonia. Not only it helps to deal with unemployment and poverty, but it also gives citizens a stable ground to live upon. UBI has many advantages, a few of them being economic growth and general prosperity of a country. Juvenile delinquency would decrease as instead, the youth would get more financial support. During a pandemic, UBI could help to secure people’s welfare and give hope for a brighter future, once the crisis will be over. UBI policies would give different opportunities to Estonians because they would have an extra income to have more freedom from the problems they might face. Considering all of the arguments above, Universal Basic Income would have a positive impact on the Estonian society.

The coronavirus pandemic has already resulted in some major changes to our lives, from the introduction of mask wearing and social distancing to a reassessment of office culture.

And it’s also resulted in discussions around, and calls for, a universal basic income. In the UK, the government introduced a furlough scheme during the first pandemic; companies forced to close because of coronavirus restrictions could get the government to cover 80% of the pay for employees, instead of laying people off.

Scottish Liberal Democrat politician Christine Jardine told CNN she was not a fan of Universal Basic Income, but the pandemic “has meant that we’ve seen the suggestion of a universal basic income in a completely different light”.

Some countries have trialled UBI already. Iran ran a scheme in 2010 giving citizens transfers of 29% of the median income each month. Poverty and inequality were reduced, and there was no sign of large amounts of people leaving the labour market. In fact, people used it to invest in their businesses, encouraging the growth of small enterprises. And in Canada, a UBI trial in Manitoba in the 1970s showed a modest reduction in workers, along with fewer hospitalisations and mental health diagnoses.

If you want to know more about universal basic income, here’s our guide to the pros and cons, and the authors and books you can turn to for guidance.

What are the pros of Universal Basic Income?

Ending poverty

Advocates for UBI say that it could help bring everyone’s income above the poverty line. Annie Lowrey, author of Give People Money, said in an interview with Vox: “We have just tons of experimental data from the US, from other countries, from Iran, from all around the world that shows that if you give people money, it reduces poverty. Just really straightforward.”

Discouraging low wages

UBI would give employees enough security to have bargaining power, say fans. Lowrey has said: “Why take a crummy job for 7.25 an hour when you have a guaranteed 1,000 dollars a month to fall back on?”

Redistributing wealth

The economic growth of high-income countries is making the rich richer, but having very little effect on the working classes. Economist Thomas Piketty has spoken about the idea of an “inheritance for all”.

Talking to the London School of Economics in 2020, he said: ‘If you look at today’s situation, the average wealth in France or Britain is about 200,000 euros per adult and the median wealth will be closer to 100,000 euros per adult, but the bottom 50% owns virtually nothing. Around 5% of total wealth is owned by the bottom 50%, which means that they have on average, one tenth of the average wealth – about 20,000 euros instead of 200,000 euros. They own very little and this is true within all age groups. It’s not that the young are poor and are about to become rich. Some of them are about to become rich, but on average, the concentration of wealth is just as large within each age group.’

Fighting technological unemployment

With advanced technology taking over more and more blue and white collar jobs, proponents of UBI say it would act as a sort of security net for the millions of people who will be left jobless by the tech revolution. Research for the Federal Reserve Bank of New York showed that the longer you are unemployed, the longer it takes to find employment. If the jobless had a small source of income to help them back on their feet, they could find new jobs and start contributing to the economy sooner.

Helping victims of domestic violence

Those who suffer domestic abuse, mainly women, become trapped in violent situations because they don’t have the means to leave them, research by Women’s Aid shows. UBI would make leaving an abusive partner easier from a financial point of view, at least. Writing in The Independent, Amelia Womack, deputy leader of The Green Party, which is in favour of UBI, said: ‘By giving everyone financial independence, UBI would ensure no woman is ever dependent on her partner to meet her basic needs. And for those in abusive relationships, one of the barriers against leaving would be removed.”

Supporting unpaid care workers

Those with ill or differently abled relatives are often forced to quit their jobs to care for them full-time. UBI would allow care-workers to support themselves, encouraging care work within the home and relieving pressure on public services that provide care to the sick and elderly.

Eliminating the need for social security

There exist countless governmental organisations responsible for helping those in poverty, handing out unemployment benefits, food stamps, subsidised housing, etc. UBI would cut a country’s spending by eliminating these organisations.

Think of it like Monopoly

Most people intuitively think that jobs lead to financial wealth, but the reality is that having money actually leads to jobs. Without the privilege of wealth, it is more difficult to build a life that makes landing a job easier. In order to get a job, you need to have a house with a shower, a set of appropriate interview clothes and the funds to cover the cost of transport and food during the working day. If you want to contribute to the economy on an even greater scale and start your own business, you’ll need even more money. In the game Monopoly, everyone starts off with a little bit of money – without it, the game wouldn’t work and no one would be able to become rich or successful. UBI is like Monopoly – everyone starts off with a little bit of money, and uses it to fuel a thriving economy.

Successful implementation of UBI would mean improvements in food security, stress, mental health, physical health, housing, education, and employment.

What are the possible cons of Universal Basic Income?

Inequity

Universal basic income would be just that: universal. That means that everyone, regardless of how poor, or rich, they were would get the same amount of money. The New Statesman’s Stephen Bush wrote in 2020 that he was more open to the case for UBI, but added: ‘Most of the time, when we talk about a universal benefit going to people “who don’t need it”, we’re talking about sufficiently small numbers that it doesn’t really matter either way…

‘To give higher earners an extra £960 a month, however, would hand them serious financial firepower to entrench their advantages, whether in saving to buy property, paying for private education, or any number of other socio-economic advantages.’

Cost

The cost of implementing UBI could be huge. In the United States it’s estimated to be about $3.9 trillion per year, and in the UK some estimates have put the cost of reworking the tax and benefits system at £28 billion. The idea is that UBI would take pressure off health services and make social security institutions redundant, but these are nevertheless enormous numbers for a government to budget for.

Motivation to work

One concern is that UBI would incite millions of workers to stop working. If people aren’t working, there is less taxable income. However, people may choose to stop working for reasons that benefit society as a whole, such as getting a better education or caring for a relative in need.

Philosophical counterarguments

Is money a birthright? Capitalist countries are built on the ideological foundation that money is something we earn – UBI would completely change this. Some believe that community service should be a requirement for receiving UBI.

In recent years many European and extra-European countries have been considering the introduction of an innovative and ambitious kind of social policy: The Universal Basic Income (UBI). This concept is not completely revolutionary; already in the 90s several economists and politicians proposed the idea of guaranteeing fair standard of life to the whole society (Rhys-Williams, 1943; Friedman, 1962; Tobin, 1966). The matter has been further discussed for the following decades and has recently gained more importance due to the rapid technological development causing increasing job losses, especially for low profile workers (Pwc, 2017). In recent years, some countries, such as Finland, Kenya or The Netherlands, have concretely experimented the sustainability and the efficacy of UBI and analysed its effects on society and the economy (Haushofer and Shapiro, 2013; Kangas et al, 2019).

Universal Basic Income is a system according to which each citizen periodically receives a set amount of money from the state on top of whatever income a person might have, without any requirement to be fulfilled. UBI is an unconditional benefit that could replace any other targeted and conditional program, including unemployment benefits. However, policymakers do not agree whether UBI should substitute any existing policy or be an addition to some of them, or even whether UBI should guarantee a minimum subsistence level (minimum Universal Basic Income) or should consist in a higher sum of money. The existing literature has largely discussed the economic and political consequences of the introduction of the UBI in order to assess its feasibility and the different attitudes towards other kinds of targeted social policies, like unemployment benefits or single-parent benefits (Busemeyer and Neimans, 2017; Groskind, 1994; Hasenfeld and Rafferty, 1989; Cook and Barrent, 1992; Fraile and Ferrer, 2005). Yet, there are no deep and complete studies analyzing the determinants of public opinion on UBI.

Nowadays, investigating the drivers of public support for Universal Basic Income is of paramount importance, since highlighting differences in opinions would provide a framework for policymakers for the practical implementation of this innovative social policy. Moreover, history has shown how public opinion can have implications in policy changes.

Therefore, the report aims at understanding the drivers for the level of support for UBI and the magnitude of their impact on it, while applying the same methodology used to study the public opinion on other social benefits. Moreover, and most importantly, the research assesses possible similarities and differences between the determinants of the support for UBI and for unemployment benefits. The comparative study will mainly be conducted between UBI and unemployment benefits, given that the latter could (at least in principle) be perfectly substituted by UBI (Fraile and Ferrer, 2005) and since the literature and the in-depth studies about them constitute a solid basis for the analysis.

Many people have suffered from financial and economic problems throughout the globe. The idea of a universal basic income (UBI) has sparked this trend. The magazine known throughout the world. The UBI is an actual cash payment for all people (2016), the economist states. Indeed, the idea behind the UBI is quite old. According to the report by James Surowiecki The Case for Free Money, the Canadian province of Manitoba had a similar experiment to the UBI in the mid-1970s by providing money to people (2016). Some people, on the one hand, suggest that the UBI should be in place, as it would have many positive effects on society. Others argue, on the other hand, that the UBI has potential risks and will bring social chaos. My own view of the UBI is very positive. I believe the UBI will solve many of today’s economic problems.

The UBI will help people maintain a decent living standard. Based on Surowiecki’s article, It would strengthen workers ‘ rights as a safety net by questioning their employers when they considered their working conditions unequal or harmful, and people used it to improve their job choices in education. On the other hands, The UBI will help each of us decide more flexibly, unlike the other welfare programs. It would eliminate all the unwanted movement of government that affects the welfare state, making it less complicated, thus making it more equal and freer. In addition, the UBI would contribute to fewer working hours and a better distribution of jobs. Therefore, People could spend more time doing other things that they think are important. McAfee’s lecture in the TED talk mentioned, the UBI gives us chance to imagine an entirely different kind of society. Society where the creators and the discovers and the performers and the innovators come together with their financiers to talk about issues, entertain, enlighten, and provoke each other.” I am therefore satisfied that the UBI is an excellent tool for the United States to go a step further than other countries.

However, others argue that the UBI will make people lazy in their workplaces. They fear that much of the unconditional cash will be lost by the detrimental use of the resources. Firstly, according to the Megan McArdle’s article Four Reasons a Guaranteed Income Won’t Work, eventually, people will not work because they receive free cash from the government.(2013) However, Evelyn Forget, an economist at the University of Manitoba, found out from the experiment held in Canada that impact on work rates had barely dropped at all and reduced their work hours (2005). Additionally, by reduce hours, job opportunities for those currently excluded from the labor market will increase. It will boost efficiency and productivity. Secondly, Surowiecki presents one result of the experiment held in the US, in the seventies.

Young people with basic income were more likely to stay at school. For example, in New Jersey, high school graduation increased by 25%. In other words, people probably won’t waste their money.

The UBI could not only reduce unemployment and increase productivity but at the same time, fix the current situation. With the UBI, the unemployed would be able to earn the opportunity to have a job. There are different views on the UBI, it’s true. However, after it has been enacted, the UBI will become an uncontroversial issue, just as Surowiecki mentioned in his article as an example of how guaranteed health care for seniors has overcome the controversy.

Technology is evolving day by day, and robots would eventually replace the work that people have done. We need to prepare for automation in the workplace. The UBI will be a great solution to improve the skills of the worker’s sector so that more specialized jobs can be accomplished. Everybody will feel necessary as time goes by, and the UBI will lead to a more productive and flourishing society.

One of the central goals of development economics has been to understand how to raise the quality of life of the people. As Adam Smith (1776) made an emphasis on his book, Wealth of Nations, “No society can be surely flourishing and happy, of which by far the greater part of the numbers are poor and miserable”. In developing countries – where people are socially excluded, deprived from exercising their political rights, dwell on dilapidated areas, have little to no literacy, experience undernutrition, and live on less than 1$ per day at purchasing power parity – poverty is an understatement. It is almost ubiquitous and extreme that no one can ever imagine, but it exists. Prominent thinkers of economic development from around the world have proposed several social development measures to end the vicious circle of poverty. However, until the 21st century, poverty is still considered an unfinished business. Thus, recognizing the universality of the issue, Universal Basic Income has become a hot topic in public debates.

Milton Friedman, in his book “Capitalism and Freedom”, supported the idea of giving everybody free money: According to him:

“We should replace the ragbag of specific welfare programs with a single comprehensive program of income supplements in cash — a negative income tax. It would provide an assured minimum to all persons in need, regardless of the reasons for their need…A negative income tax provides comprehensive reform which would do more efficiently and humanely what our present welfare system does so inefficiently and inhumanely. The proposal for a negative income tax is a proposal to help poor people by giving them money, which is what they need, rather than as now, by requiring them to come before a government official to tally all their assets and liabilities. The number of people on welfare has been skyrocketing. Why? Because once they get on welfare, we make it almost impossible for them to get off. In order for somebody who gets on to get off, he or she has to be able to have a really good job, because to get off gradually, to earn a little bit, now doesn’t pay. The virtue of [a negative income tax] is precisely that it treats everyone the same way…there’s none of this unfortunate discrimination among people.”

The Universal Basic Income (UBI) is a revolutionary concept which suggests the idea of handing out money to everyone regardless of their income, wealth, and employment status. As long as the individual is a legal resident of the country, he/she is entitled to a monthly stipend sufficient for him/her to live above the poverty line. In other words, this “basic income” is given to the people, not as a favor, but as a right to keep each individual from falling into poverty.

The good thing about basic income given to every individual is that it gives the people the venue to voice their demand in the market. That is, the people can use the money to buy the things that they think they need instead of experts providing the things they think are essential to human existence. This leads to production efficiency because it allows for the true demand for goods and services to be reflected in the market. Businesses produce according to their perceived demand for their product. However, because of the market price, there are portions of the market left unserved. But because of basic income, businesses would willingly produce more to accommodate those who have zero means for basic goods and services but are now empowered to provide for themselves. In other words, UBI allows for the goods and services to be produced in the most efficient way.

Moreover, this scheme empowers the most vulnerable sector of the society, especially the women. As child rearing is usually attributed women’s responsibility, the central role of women in preventing the poverty being transferred from generation to generation is crucial since the economic status of the mother is a strong indicator of the welfare of their children. Mothers tend to spend most of their income for the welfare of their children. Thus, if mothers are given cash on hand, the money is directly spent on food and education of their children. This, in effect, will decrease the instances of children being illiterate as they are being sent to school and being undernourished as they are being served with nutritious food. In addition, since the money is given regardless of employment status, there is an incentive for mothers to reserve some of their time to take good care of their children. Thus, morbidity within the household is less likely to happen.

Another positive note about UBI is that it can encourage people to take extra risk to own a business. Not only will the multiplier effect would do an amazing job of accelerating growth, but also create demand in the labor market and goods and services market as the immediate consequence of the increase in the purchasing power of the people. This suggest that increases in economic activity is more likely to take place in the future.

Looking at the positive consequences which the UBI may bring about, it seems like it can solve the widespread poverty, even its worst forms. But is it the solution which we all have searching for, particularly in the developing world?

Skeptics of UBI argue that UBI may not be sustainable as it may cost the government too much to provide the same amount of money to its residents on a periodic basis. However, poverty is far more expensive than providing each individual free money. In terms of malnutrition alone, the Philippine government costs PHP220 billion each year due to the effects of undernutrition, such as child stunting, anemia, and iodine deficiency. This is equivalent to 1.5 percent of the Philippine GDP in 2015. But investing in interventions to combat malnutrition will cost the government only around PhP5.7 billion per year. This means that for every Php50 investment in these interventions the government can save around Php624 caused by forgone earnings or in health expenditures because of undernutrition.

In an influential analysis made by University of Manitoba economist Evelyn Forget almost 30 years after the experiment in Dauphin, Canada, she found that hospitalizations dropped significantly while the MINCOME program was in effect, especially for mental health problems, accidents, and injuries (Glazer, 2017). This would imply that UBI will, of course, cost the government. However, if we are to quantify the long-term benefits of the basic income, developing countries will surely reap its positive results though improvements in the quality of life.

Disincentives, such as dependency on the transfers, were also proven wrong in most empirical studies conducted. Forget, Calnitsky, Widerquist, Hum, and Simpson suggest a “UBI allows people to participate in social welfare without shame and does not lead to a decrease in labor productivity”. Minor reductions in the labor supply might happen but as UBI makes workers more flexible, these are more than offset and complemented by other much more significant increases in quality of life of the people.

Contentions that inflation rate might be out of control due to the increase in private spending is also far from being probable. In UBI, there is no actually new money created. People spend the money transferred to them. In fact, instead of an inflationary pressure, the GDP per capita will increase as a result of the multiplier effect.

Assertions on UBI being less effective than means-tested programs were also less substantiated by empirical studies. Effectiveness of means-tested programs in reducing poverty can be weakened by several structural factors. Francese & Prady (2018) cites the following:

“high information and administrative costs requiring high and reliable capacity to target eligible households and monitor complex programs (Sala-i-Martin and Subramanian 2013); multiple obstacles (high compliance costs, bad information, social stigma…) that affect take-up by eligible households (Atkinson 2015); the need to keep fiscal costs under control that often results in high marginal withdrawal rates that, in turn, tend to discourage labor market participation (Friedman 1968; Brewer, Saez, and Shephard 2010)”

Going back to the question above, is this the universal program which the developing world should pursue? Well it depends on the following basic features of UBI (Francese & Prady, 2018):

1. Why? What goals? A UBI could be used as a tool to achieve redistributive objectives, i.e., to tackle poverty and inequality, and to broaden the coverage of income-support programs (allowing social protection systems to reach parts of the population currently left out). If designed as a one-time endowment, it may be regarded as serving the purpose of improving equality of opportunity at an early stage of life.

2. Who? The “universality” in the name of the tool suggests at the same time a broad pool of benefit recipients, and a condition-free benefit. However, how broad the boundaries should be is not exempt from passionate discussion. For example, should participation be limited to the country citizens or to residents? What does “participating” or “belonging” to a group mean and how is it checked?

3. What? How much? The appropriate level of transfers also needs to be defined and is linked with the policy objectives. In general, the magnitude of the transfer can be related to the needs that the program is supposed to cover; and it is also affected (and most likely constrained) by the amount of resources that can be raised to finance the program. As benchmarking each individual’s many needs is impracticable, common benchmarking methods calibrate the transfer as a fraction of a country poverty line or median income. This type of benchmarking further raises the question of whether to modulate the transfer value across different types of individuals (e.g., a lower value for children than for adults or a lower value for active individuals than for children and elderly). Finally, the nature of the transfer is also subject to interpretation as in-kind transfers could be chosen over cash transfers, and vice versa.

4. When? This dimension looks at the timing of disbursement but is also linked to the nature of the program that considers, in particular, whether transfers should be made on a regular basis (monthly/yearly) or as a one-off.

The success of any UBI depends on what combinations of these features will policy makers will implement. Empirical evidence from the success of UBI in Namibia, Brazil, Canada, Iran, and Finland supports the idea that free money indeed decreased the incidence of poverty. That is, the evidence from these studies has been very positive, with little evidence of the negative outcomes as contended by the non- supporters of UBI. These positive effects come on a very wide range of outcomes, from education and health to entrepreneurship and so on. Other developing countries are in the transition of doing the same. These large sums of money could have otherwise used to implement projects designed to achieve narrower goals for health, education, infrastructure, nutrition, and so on. But the moral is that, if there is something which any country cannot afford to give to its people, it should be poverty, not cash.

References

1. Glazer, S. (2017). Universal basic income. CQ researcher, 27, 725-748. Retrieved from http://library.cqpress.com/
2. Legarda, L. (2018). The Economic Cost of
3. Undernutrition in the Philippines: Privilege Speech of Senator Loren Legarda. Senate Session Hall. Retrieved from http://lorenlegarda.com.ph/privilege-speech-the-economic-cost-of-undernutrition-in-the-philippines/
4. Hum, Derek, Simpson, Wayne. “Economic Response to a Guaranteed Annual Income: Experience from Canada and the United States.” Journal of Labour Economics, vol. 11, no. 1, 1993, pp. 263-294.
5. Francese M & Prady D. (2018). Universal Basic Income: Debate and Impact Assessment: IMF Working Paper.
6. Orfalea, M. (2015). Why Milton Friedman Supported a Guaranteed Income (5 Reasons). Retrieved from https://medium.com/basic-income/why-milton-friedman-supported-a-guaranteed-income-5-reasons-da6e628f6070

Across the globe, even in this great era of modern development and equality, there are still millions who live in impoverish conditions, and despite their hard labour they are still unable to earn enough income to support themselves and their families. These terrible living conditions can lead to malnutrition and even death by starvation in some cases.

However, there is a solution to these problems, the implementation of a universal basic income would drastically improve the lives of millions across the globe, giving them enough income to feed their families and have a higher quality of life. But firstly, how would the basic universal income work? The idea is that all adults will receive a payment to cover the basic costs of living, regardless of their wealth, employment status or class. The implementation of such a system should end poverty globally, and will allow the earth’s population to live in prosperity and have enough money to receive education.

This concept is not new either, it has been debated for a long time, but there have been little advances in implementing this system on a global scale. However, there have been some small-scale uses of this system to test its effectiveness. One such place where this has occurred is in Namibia, Africa. From January 2008 to December 2009, a basic income project was implemented by the Namibian Basic Income Grant Coalition, and the system was implemented into the two villages of Otjievero and Omitara. All adults in the two villages were given the equivalent of 12 US dollars, and despite it being a seemingly low amount, it had a huge impact on the villages. It was found that malnutrition rates had fallen, school attendance rates has risen and that the community’s income had risen significantly and had become greater than the amount that had been given to them as part of the scheme. This is as the money gave the villagers more money to partake in economic activities and to enterprise to make more money. It was also found that overall crime rates had fallen by 42%, that stock theft had fallen by 43% and that other theft had fallen by just under 20%. This is a prime example of the positive externalities that can occur as a result of a universal basic income, as it will allow the quality of life of the people affected to increase exponentially, resulting in economic growth as a result of increased economic activity, as well as a decrease in negative externalities such as theft as people are no longer forced into crime by their low incomes.

However, despite the seemingly only positive results, there is data to suggest otherwise. Data collected by economist Milton Friedman from pilot schemes in Seattle, Denver and Indiana in the late 1960s to early 1970s showed that the introduction of a basic universal income in these areas lead to a 17% reduction in work effort from men, as well as a 9% reduction in work effort from women, suggesting that the implementation of a universal basic income would lead to a drastic decrease in the output of certain economies as people would rely on the income from the basic income as oppose to working harder in order to earn more. This could lead to major negative externalities, such as a fall in GDP as less goods are produced and sold, as well as unemployment as producers lay off workers due to the fall in demand for consumer goods as less is produced.

Despite the potential economic costs of a universal basic income, a study conducted in Manitoba, Canada from 1974 to 1979 concluded that the introduction of a basic income lead to huge improvements in both the mental and physical health of the population, as it was found that there was an 8.5% drop in hospital visits, fewer emergency room visits fewer incidents of work related injuries and accidents. As well as this, fewer patients were admitted to psychiatric hospitals and there were less reported cases of mental illness. This improvement in health could benefit governments substantially, as less would be spent on health services and so it could be invested elsewhere.

To conclude, whilst I believe that the implementation of a universal basic income would not be a good idea, as it has been proven to have to negative economic effects when tested in certain areas, I believe that an increase in the amount of small scale projects implementing basic incomes to certain areas would be more beneficial to the world, as it appears that some areas have benefitted to a much greater extent than others where this system has been tested, such as in Namibia and Canada, where the positive impacts of a basic income have been huge.

Estonia is a small but developed country, with a population of 1.3 million, located in Northern Europe. Its high-income economy is often referred to as the fastest growing in the EU. In addition to that, Estonian citizens obtain the free education and universal health care. On the international market, the country stands out for its I.T. advancements. In 2005, Estonia became the first state in the world to hold elections over the internet, and in 2014, the first to provide e-residency. In terms of earnings, 29% of Estonian citizens either earn a minimum wage of 584€ (2020) or less than that. Therefore, those citizens do not work for a decent level of life but rather for survival. With all of that being said, there are factors that would support the idea of Universal Basic Income, if it were to be accepted in Estonia. The factors being, poverty and unemployment, and the current COVID-19 pandemic.

The input of Universal Basic Income (UBI) would make a great change in the members of lower class. Nowadays, people earning minimum wage, find themselves in a survival situation for providing food and a place to live for themselves and/or their families. It has a direct effect on their psychological state because such a person always remains under stress. UBI would provide a base for lower-class families. Indeed, they would not only stop worrying about the next day, but it would also provide them with better opportunities for the future. For instance, they could ensure all the vital needs for their children, such as clothes and school supplies by devoting more money to them as well as offering a higher level of education. From a political perspective, people would want to be more involved with their government. A country where the level of life of citizens is high is a blooming country. Thievery in Estonia would decrease as well. The statistics of the Estonian Ministry of Justice show, that in 2017, 1022 cases of crimes were registered by the underage people. The majority of those cases were small thefts, where teenagers were trying to steal to earn some money that the parents could not afford to give to them. UBI would solve this problem because as mentioned previously, parents will be able to invest more in their children. As parents would have more financial resources, they will be able to give their children a prospect for development such as, extracurricular activities and hobbies that would guarantee them a life where they would be able to develop as people rather than involving themselves in criminal activities. It would develop their intelligence, physical health, and soul. UBI would affect the economy as well. The Unconditional Basic Income means that enterprise would be financed by Estonian public sector through citizens. Those enterprises provide goods and services that are essential to a society as people could not live in dignity and participate in the economy without. Those including food production, clothing industry, telecommunication services, services related to housings and transport. Meaning, that instead of going straight to enterprises, taxes and salaries, money in the national economy would beforehand stop in the citizens’ back accounts before continuing to the rest. Once people will be financially stable, they will not be stressed out and will have more interest in different subjects that will, therefore, help the country by decreasing criminal activities and developing people’s interest.

Since January, the pandemic of coronavirus has affected the whole world. Although being a small country, as of today (3.04), there are already 1018 cases of coronavirus in Estonia. During this period, many people have lost their jobs or have seen their salaries decrease. The stress levels of the citizens are very high and with the possibility of losing their jobs and/or money, it adds even more stress up. Many small and medium enterprises have no support from the government, and they have no choice but to struggle alone during the crisis. If UBI policy was to be adopted in Estonia during today’s pandemic, it would have a great effect on the country. With the money provided to people, it could save jobs and once the crisis is over, not search for a new job but continue working. The stress would go down as well because people would know that they have full support from the government, thus contributing positively on their mental health as well. As mentioned previously, education is free in Estonia, including the food. With the closing of the educational institutions, children, whose parents cannot afford nutritious food, lose the benefits of free breakfasts and lunch, given to them 5 times a week. As food provided by the government is not available anymore, families are forced to spend even more money. Universal Basic Income would give those families an opportunity, during the pandemic, to be able to offer all the necessary in those hard times.

Universal Basic Income can be a plausible solution for Estonia. Not only it helps to deal with unemployment and poverty, but it also gives citizens a stable ground to live upon. UBI has many advantages, a few of them being economic growth and general prosperity of a country. Juvenile delinquency would decrease as instead, the youth would get more financial support. During a pandemic, UBI could help to secure people’s welfare and give hope for a brighter future, once the crisis will be over. UBI policies would give different opportunities to Estonians because they would have an extra income to have more freedom from the problems they might face. Considering all of the arguments above, Universal Basic Income would have a positive impact on the Estonian society.

The coronavirus pandemic has already resulted in some major changes to our lives, from the introduction of mask wearing and social distancing to a reassessment of office culture.

And it’s also resulted in discussions around, and calls for, a universal basic income. In the UK, the government introduced a furlough scheme during the first pandemic; companies forced to close because of coronavirus restrictions could get the government to cover 80% of the pay for employees, instead of laying people off.

Scottish Liberal Democrat politician Christine Jardine told CNN she was not a fan of Universal Basic Income, but the pandemic “has meant that we’ve seen the suggestion of a universal basic income in a completely different light”.

Some countries have trialled UBI already. Iran ran a scheme in 2010 giving citizens transfers of 29% of the median income each month. Poverty and inequality were reduced, and there was no sign of large amounts of people leaving the labour market. In fact, people used it to invest in their businesses, encouraging the growth of small enterprises. And in Canada, a UBI trial in Manitoba in the 1970s showed a modest reduction in workers, along with fewer hospitalisations and mental health diagnoses.

If you want to know more about universal basic income, here’s our guide to the pros and cons, and the authors and books you can turn to for guidance.

What are the pros of Universal Basic Income?

Ending poverty

Advocates for UBI say that it could help bring everyone’s income above the poverty line. Annie Lowrey, author of Give People Money, said in an interview with Vox: “We have just tons of experimental data from the US, from other countries, from Iran, from all around the world that shows that if you give people money, it reduces poverty. Just really straightforward.”

Discouraging low wages

UBI would give employees enough security to have bargaining power, say fans. Lowrey has said: “Why take a crummy job for 7.25 an hour when you have a guaranteed 1,000 dollars a month to fall back on?”

Redistributing wealth

The economic growth of high-income countries is making the rich richer, but having very little effect on the working classes. Economist Thomas Piketty has spoken about the idea of an “inheritance for all”.

Talking to the London School of Economics in 2020, he said: ‘If you look at today’s situation, the average wealth in France or Britain is about 200,000 euros per adult and the median wealth will be closer to 100,000 euros per adult, but the bottom 50% owns virtually nothing. Around 5% of total wealth is owned by the bottom 50%, which means that they have on average, one tenth of the average wealth – about 20,000 euros instead of 200,000 euros. They own very little and this is true within all age groups. It’s not that the young are poor and are about to become rich. Some of them are about to become rich, but on average, the concentration of wealth is just as large within each age group.’

Fighting technological unemployment

With advanced technology taking over more and more blue and white collar jobs, proponents of UBI say it would act as a sort of security net for the millions of people who will be left jobless by the tech revolution. Research for the Federal Reserve Bank of New York showed that the longer you are unemployed, the longer it takes to find employment. If the jobless had a small source of income to help them back on their feet, they could find new jobs and start contributing to the economy sooner.

Helping victims of domestic violence

Those who suffer domestic abuse, mainly women, become trapped in violent situations because they don’t have the means to leave them, research by Women’s Aid shows. UBI would make leaving an abusive partner easier from a financial point of view, at least. Writing in The Independent, Amelia Womack, deputy leader of The Green Party, which is in favour of UBI, said: ‘By giving everyone financial independence, UBI would ensure no woman is ever dependent on her partner to meet her basic needs. And for those in abusive relationships, one of the barriers against leaving would be removed.”

Supporting unpaid care workers

Those with ill or differently abled relatives are often forced to quit their jobs to care for them full-time. UBI would allow care-workers to support themselves, encouraging care work within the home and relieving pressure on public services that provide care to the sick and elderly.

Eliminating the need for social security

There exist countless governmental organisations responsible for helping those in poverty, handing out unemployment benefits, food stamps, subsidised housing, etc. UBI would cut a country’s spending by eliminating these organisations.

Think of it like Monopoly

Most people intuitively think that jobs lead to financial wealth, but the reality is that having money actually leads to jobs. Without the privilege of wealth, it is more difficult to build a life that makes landing a job easier. In order to get a job, you need to have a house with a shower, a set of appropriate interview clothes and the funds to cover the cost of transport and food during the working day. If you want to contribute to the economy on an even greater scale and start your own business, you’ll need even more money. In the game Monopoly, everyone starts off with a little bit of money – without it, the game wouldn’t work and no one would be able to become rich or successful. UBI is like Monopoly – everyone starts off with a little bit of money, and uses it to fuel a thriving economy.

Successful implementation of UBI would mean improvements in food security, stress, mental health, physical health, housing, education, and employment.

What are the possible cons of Universal Basic Income?

Inequity

Universal basic income would be just that: universal. That means that everyone, regardless of how poor, or rich, they were would get the same amount of money. The New Statesman’s Stephen Bush wrote in 2020 that he was more open to the case for UBI, but added: ‘Most of the time, when we talk about a universal benefit going to people “who don’t need it”, we’re talking about sufficiently small numbers that it doesn’t really matter either way…

‘To give higher earners an extra £960 a month, however, would hand them serious financial firepower to entrench their advantages, whether in saving to buy property, paying for private education, or any number of other socio-economic advantages.’

Cost

The cost of implementing UBI could be huge. In the United States it’s estimated to be about $3.9 trillion per year, and in the UK some estimates have put the cost of reworking the tax and benefits system at £28 billion. The idea is that UBI would take pressure off health services and make social security institutions redundant, but these are nevertheless enormous numbers for a government to budget for.

Motivation to work

One concern is that UBI would incite millions of workers to stop working. If people aren’t working, there is less taxable income. However, people may choose to stop working for reasons that benefit society as a whole, such as getting a better education or caring for a relative in need.

Philosophical counterarguments

Is money a birthright? Capitalist countries are built on the ideological foundation that money is something we earn – UBI would completely change this. Some believe that community service should be a requirement for receiving UBI.

In recent years many European and extra-European countries have been considering the introduction of an innovative and ambitious kind of social policy: The Universal Basic Income (UBI). This concept is not completely revolutionary; already in the 90s several economists and politicians proposed the idea of guaranteeing fair standard of life to the whole society (Rhys-Williams, 1943; Friedman, 1962; Tobin, 1966). The matter has been further discussed for the following decades and has recently gained more importance due to the rapid technological development causing increasing job losses, especially for low profile workers (Pwc, 2017). In recent years, some countries, such as Finland, Kenya or The Netherlands, have concretely experimented the sustainability and the efficacy of UBI and analysed its effects on society and the economy (Haushofer and Shapiro, 2013; Kangas et al, 2019).

Universal Basic Income is a system according to which each citizen periodically receives a set amount of money from the state on top of whatever income a person might have, without any requirement to be fulfilled. UBI is an unconditional benefit that could replace any other targeted and conditional program, including unemployment benefits. However, policymakers do not agree whether UBI should substitute any existing policy or be an addition to some of them, or even whether UBI should guarantee a minimum subsistence level (minimum Universal Basic Income) or should consist in a higher sum of money. The existing literature has largely discussed the economic and political consequences of the introduction of the UBI in order to assess its feasibility and the different attitudes towards other kinds of targeted social policies, like unemployment benefits or single-parent benefits (Busemeyer and Neimans, 2017; Groskind, 1994; Hasenfeld and Rafferty, 1989; Cook and Barrent, 1992; Fraile and Ferrer, 2005). Yet, there are no deep and complete studies analyzing the determinants of public opinion on UBI.

Nowadays, investigating the drivers of public support for Universal Basic Income is of paramount importance, since highlighting differences in opinions would provide a framework for policymakers for the practical implementation of this innovative social policy. Moreover, history has shown how public opinion can have implications in policy changes.

Therefore, the report aims at understanding the drivers for the level of support for UBI and the magnitude of their impact on it, while applying the same methodology used to study the public opinion on other social benefits. Moreover, and most importantly, the research assesses possible similarities and differences between the determinants of the support for UBI and for unemployment benefits. The comparative study will mainly be conducted between UBI and unemployment benefits, given that the latter could (at least in principle) be perfectly substituted by UBI (Fraile and Ferrer, 2005) and since the literature and the in-depth studies about them constitute a solid basis for the analysis.