Micro- and macro economic effects of unconditional basic income and participation income: A systematic review

This paper reviews 48 studies on the micro and macro-economic effects of Unconditional Basic Income (UBI, including NIT or Negative Income Tax) and Participation Income related programs (PI). Compared to previous review studies in the field, it advances on viewing the broader (un)intended) effects on income, (mental) health, subjective wellbeing and related outcomes (trust, social participation, substance abuse, crime etc.). Given the increasing number of studies on UBI-like programmes, the review focuses on RCT field experiments and simulation studies of UBI-PI while leaving out conditional cash transfer programs (CCT) and laboratory experiments. All programmes aim at providing a guaranteed minimum income either for the population at large or for specific groups (such as unemployed). We employ a systematic review with the main purpose of bringing together and learning from the evidence on these broader effects. Our focus is on studies of the effects of the older programmes in Canada and the United States during the 1970s and 1980s and of the more recent programs in the European context from the 1990s on. Recent US/Canada studies re-estimating the found negative labor supply effects (notably for married women with children) in the original studies of the experiments, came to much lower and even insignificant estimates. The effects on reducing poverty and inequality but also on health and subjective wellbeing were however more positive. The studies on the European programmes and experiments (Finland, Spain, Netherlands) show slightly more positive but still mostly insignificant labour supply effects. More positive and significant effects were however found on subjective wellbeing, (mental) health and trust which are however less pronounced than in Canada and the US. Some welfare state lessons that can be drawn from these results are briefly discussed.