UBI Piloters' Network
Newsletter 21, April, 2025
New study results from Germany which challenges many of the criticisms of Universal Cash Transfers.
The German Institute for Economic Research (DIW Berlin) in collaboration with "Mein Grundeinkommen e.V." and the Vienna University of Economics have recently released their results for the “Pilotprojekt Grundeinkommen" a three-year experiment into Universal Basic Income in Germany.
For those fortunate to speak German here is the official document by Sandra Bohmann, Susann Fiedler, Max Kasy, Jürgen Schupp, and Frederik Schwerter.
For others here is a A.I compiled summary of the results.
(Credit to Dániel Fehér, UBI Europe, www.UBIE.org for the A.I summary)
Study Design
- Participants: 107 individuals aged 21-40, living alone with pre-study monthly net incomes between €1,100-2,600
- Control group: 1,580 individuals with similar demographics
- Duration: 3 years (June 2021 to May 2024)
- Intervention: Monthly unconditional payments of €1,200 to treatment group
Key Findings
1. Labor Market Behavior
- No withdrawal from labor market: Participants receiving UBI did not exit the workforce
- Working hours maintained: No significant reduction in hours worked
- Employment rates: Both UBI group and control group maintained approximately 90% employment throughout the study
- Income development: Minor (statistically insignificant) reduction in earnings observed in the UBI group
2. Financial Behavior
- Prudent money management: About 37% of UBI payments were saved (€447)
- Altruistic spending: Approximately 7% of UBI payments went to charity or supporting family and friends
- Discretionary spending: About half of the UBI payments were used for consumption, with notable increases in spending on clothing (6%), leisure activities (6%), and travel (31%)
- Housing costs: No significant changes in housing expenditures
3. Well-being and Mental Health
- Significant improvement in mental health: UBI group showed 30% of a standard deviation improvement
- Overall life satisfaction increase: 42% of a standard deviation improvement, comparable to significant positive life events like marriage
- Sustained effects: Benefits remained consistent throughout the three-year period without habituation effects
- Increased autonomy: Recipients reported greater perceived control over their lives
- Social connections: UBI recipients spent 3.8 hours more per week with friends, family, and partners
Implications for UBI Policy Discussions
The findings challenge several persistent concerns about UBI, particularly regarding work disincentives. The study provides evidence-based input to the ongoing debate about social security system reform, especially in the context of demographic changes and evolving labor markets.
The researchers conclude that the results debunk the stereotype of UBI leading to a "social hammock" effect. While the study acknowledges limitations (focused on individuals rather than households, limited to three years, unable to measure macroeconomic effects), it provides valuable insights into how unconditional cash transfers affect individual behavior and well-being.
As one of the study authors, Jürgen Schupp, states: "With these results, particularly regarding labor market behavior, certain stereotypes like that of the 'social hammock' can be objectified. Even though UBI is not currently on the political agenda, all reform options will need to be considered for the urgently needed restructuring of social systems – including universal basic income."
UBI4ALL Raffle Winner
On Sunday, 30 March, UBI4ALL again raffled off an amount of € 9,600 paying out monthly for 1-5 years depending on the living costs in the winner's country.
The lucky winner with lotnumber 14912 was Luca. Luca lives in Italy in the city of Silvi near the region where the famous red wine Montepulciano is coming from. The company he worked for had to close down and so he lost his job a few years before he could start his retirement. In Italy, like in many places unfortunately, it is nearly impossible to find a job after your 50th birthday so he had to bridge the gap somehow. But now he is quite safe with his pension. Nevertheless, winning the UBI for one year helps in different ways.
Luca has to move to another apartment and this always means extra costs. The unexpected 800 Euros per month are supporting Luca in this project.
With contributions from representatives of HUMAN ACT as well as MILLIONAIRES FOR HUMANITY you can review the raffle livestream here:
Everyone aged minimum 16 years is eligible to register at UBI4ALL.org and participate in the raffles.