Some citizens of Utrecht will soon receive windfalls of extra money as part of the Dutch city’s daring new experience with the basic income idea.
Basic income is a regular and unconditional payment designed to provide enough money to cover one’s basic cost of living. In January 2016, Netherlands’ 4th largest city and its partner (the University of Utrecht) will create several regimes for welfare recipients to test the theory.
A couple of citizens already under the welfare state will start receiving monthly checks running from $1000 for adults to $1450 for couples and families every month. Out of the 300 participants, at least 50 of them will receive unconditional basic incomes which will not be subjected to any regulation. Therefore, even if they find jobs or start earning an income from other sources, they will still receive their disbursements.
This was explained by Nienke Horst, one of the project managers working for the Utrecht city government. Additionally, there will be 3 other groups with different sets of rules and one control group following the current welfare laws. There would also be requirements qualifying income and job – seeking.
The aim of this experiment would be to challenge the idea that people receiving public money ought to be punished and patrolled, announced Horst. Traditionally, basic income has come under criticism from people who claim that it does not make people work harder and, therefore, damages economies.
She informed Quartz that some people said that they would not try as hard as they did before to get a job. The experiment will help the officials find out the truth behind this statement. However, her view remains optimistic and she announced that the city officials think that the free money would make people happier and more willing to find jobs.
Basic income has been tested in other countries, including Malawi and India, in the past. However, the most famous basic income experience was conducted in Dauphin, Manitoba, in Canada. Between ’74 and ’79, the income program gave stipends to everyone in the town, which varied according to every citizen’s individual income.
This experiment was studied by Evelyn L. Forget while working as an economist for the University of Manitoba. Her report titled ‘The Town with No Poverty’ was published in 2011 and concluded that basic income basically reduced poverty in Dauphin and alleviated a couple of other problems.
As skeptics had already predicted, working hours dropped mainly among young men who chose to continue with their education and mothers who utilized the added financial freedom to focus their attention on childbearing.
Although people thought this was negative, it proved that men were much less likely to drop out of school – further affecting their lifetime earnings in a positive way, she informed Quartz. Additionally, women were able to take extended maternity leaves.
Forget also announced that the participants were even less likely to get hospitalized. The health facilities in the town saw drops in mental – health – related complications, further reducing costs.
However, the substantial difference between the Utrecht experiment and Dauphin’s Mincome is whereas the Canadian program happened to be universal, the Utrecht one would be restricted to people who were already on welfare. Perhaps the Utrecht experiment will offer even more insight.