A German experiment gave people a basic monthly income. The effect on their work ethic was surprising

The German study found that people receiving a universal basic income felt they had more time to spend with their partners, families and friends. (Alexander Gixt/iStockphoto/Getty Images via CNN Newsource)

A German experiment has found that people are likely to continue working full-time even if they receive no-strings-attached universal basic income payments.

Universal basic income, also known as guaranteed income, is the idea of giving money to everyone regardless of how much they already earn – to give them the freedom to move between jobs, train for new positions, provide care, or engage in creative pursuits.

Proponents have included the likes of Elon Musk, who said in 2018 that “universal income will be necessary over time if AI takes over most human jobs.” U.S. Democratic presidential candidate Andrew Yang ran on a platform in 2020 to give Americans US$1,000 a month, calling the idea a “game changer.”

Mein Grundeinkommen (My Basic Income), the Berlin-based non-profit that ran the German study, followed 122 people for three years. From June 2021 to May 2024, this group received an unconditional sum of €1,200 ($1,365) per month.

The study focused on people aged between 21 and 40 who lived alone and already earned between 1,100 euros (around $1,250) and 2,600 euros ($2,950) a month. They were free to use the extra money from the study on anything they wanted.

Over the course of three years, the only condition was that they had to fill out a questionnaire every six months that asked about different areas of their lives, including their financial situation, work patterns, mental well-being and social engagement.

There have been similar experiments testing the feasibility of universal basic income, like one that kicked off in Stockton, California in 2019, which gave out payments of $500 a month. At the time, researchers said it could have a “profound” impact on public health. In Europe, the idea gained steam during the Covid-19 pandemic, with one Oxford University study finding that 71 per cent of Europeans in 2020 favoured the introduction of a universal basic income.

One concern voiced by critics is that receiving a basic income could make people less inclined to work. But the Grundeinkommen study suggests that may not be the case at all. It found that receiving a basic income was not a reason for people to quit their jobs. On average, study participants worked 40 hours a week and stayed in employment – identical to the study’s control group, which received no payment.

“We find no evidence that people love doing nothing,” Susann Fiedler, a professor at the Vienna University of Economics and Business who was involved with the study, said on the study’s website.

Unlike the control group, those receiving a basic income were more likely to change jobs or enrol in further education. They reported greater satisfaction in their working life – and were “significantly” more satisfied with their income.

Matthew Johnson, a professor of public policy at Northumbria University in the U.K., who works on basic income and authored a book on the topic, called the findings “unsurprising.”

“This study confirms growing evidence that we and others have long presented: there is no evidence that Basic Income reduces economic and labour market activity,” he told CNN. “On the contrary, it gives workers the economic security to take good risks and avoid bad ones in their working lives.”

And can more money buy happiness? According to the study, the recipients of a basic income reported feeling that their lives were “more valuable and meaningful” and felt a clear improvement in their mental health.

It could also buy freedom – or at least more of it. Recipients, especially women, reported feeling a greater sense of autonomy in their lives. Despite working the same hours as before, they felt there was more time in the day for activities like sleeping, volunteering, and spending time with their loved ones.

“We know that increasing the amount, security and predictability of income improves key outcomes in health, activity, entrepreneurship, education and almost all other areas of life,” said Johnson.

His colleague Elliott Johnson, a fellow at Northumbria who researches how welfare systems affect health and whether basic income could address existing problems, said the study demonstrates why people need unconditional support.

“Reducing conditionality and ensuring people have enough money for the basics improves health and removes perverse disincentives from engaging in work as well as physical and social activity,” he told CNN, emphasizing the needs of people with disabilities.

“Governments would be well-advised to see it as an investment in long-term population health,” added Johnson.

More than two million people applied to participate in the study, which was entirely funded by private donors.

The organization, which has been giving away basic incomes for more than 10 years in an effort to understand the real-life applications of the concept, says over 200,000 people have supported its work through monthly donations.

“Unconditional basic income is not a static concept, but one that needs to be experienced and discussed,” it says on its website. People enter raffles for a chance to receive the basic income, which is paid for using the crowdfunded donations.

Now the experiment has given the organization a sense of how a basic income could work on an individual level, it says it hopes to include groups that are more representative of society as a whole.

Looking to the future, Mein Grundeinkommen says challenges from the climate crisis, demographic changes, and technology will pose important questions about the role of the welfare state – and the place of universal basic income within it.

Rosa Rahimi, CNN