Universal Basic Income does not Reduce Worker Productivity, Study Finds

In order to understand how automation and universal basic income (UBI) could impact entrepreneurs, companies and the public sector in the near future, a group of economists from Spain conducted an experiment, including 900 individuals, 98% of whom were students (41% male, 59% female).

As described in a paper for the journal Human and Social Sciences Communications, participants were asked to perform a set of tasks and were paid based on their performance.

Next, to tease out the potential effects of automation, the researchers introduced nine different scenarios, such as replacing certain participants with robots and providing a universal basic income worth about 20% of the workers’ median pay.

While the experiments were conducted in a lab, the researchers did their best to model the experimental conditions to match real world conditions.

“It’s not like I just give you money and then you don’t feel you should care much about what to do with it,” said co-author Angel Sánchez. “No – you earned it and you’re going to feel it’s yours and you don’t want to throw it away. And that’s key in the experiment because that’s what we think gives external validity to the experiment.”

The automation-related social, economic, and political difficulties that may arise in the near future could be mitigated by providing people with a universal basic income. Image: pixabay.com

The authors are confident that their findings are applicable to other countries as well, citing, e.g., Finland’s experiment with universal basic income in 2017 and 2018. In those studies, researchers found that UBI increased people’s mental and economic well-being, and had only a negligible effect on employment.

Not before long we should also see the results of Spain’s own nationwide experiment (launched in response to the COVID-19 pandemic) with UBI, providing $500 to each adult in the programme, and primarily focused on families and single-parent households. The goal is to reach 1 million homes in total.

Sánchez would also like to see more research on robots and automation, including the idea of taxing companies for each worker replaced by a machine. He claims that, moving forward, we will need to figure out a way to fund UBI without impacting technological progress.

“So other theoretical studies would be useful, too, in what’s the way to either prevent workers from being substituted by machines or to get money from the guys that are now using machines to compensate the workers that are laid off,” Sánchez said. “These two schemes need a lot of research. There’s very little done there.”

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