Germany
(Getty Images)
  • From this week 120 Germans will receive a form of universal basic income every month for three years.
  • The volunteers will get monthly payments of €1,200 (almost R25,000) as part of an experiment into basic income.
  • The study will compare the experiences of 120 volunteers with 1,380 people who do not receive payments.
  • 140,000 individuals have helped fund the study through donations.
  • Universal basic income has gained traction in recent years and has already been tested in Finland.
  • Supporters say it reduces inequality and improves public wellbeing, while opponents argue it is too expensive and discourages work.
  • Visit Business Insider's homepage for more stories.

Germany is about to become the latest country to trial a universal basic income after 1,500 people signed up to a three-year experiment into how it affects the economy and the wellbeing of recipients.

As part of the study, 120 individuals will receive the equivalent of R25,000 a month for 3 years, which is just above Germany's poverty line, with their life outcomes compared to another group of 1,300 people who will not receive the payments.

The study will be conducted by the German Institute for Economic Research and has been funded by 140,000 private donations.

All participants will be asked to complete questionnaires about their lives, work, and emotional state, to see if basic income has had a significant impact.

Universal basic income is the idea that a government should pay a lump sum of money to each of its citizens, usually once a month, regardless of their income and employment status, effectively replacing means-tested benefits.

Its proponents argue that it would reduce inequality and also improve public wellbeing by providing people with more financial security. Its opponents say it would be too expensive and discourage people from going to work. The idea has gained traction in recent years amid recent financial crises and growing inequality in some Western countries.

Jürgen Schupp, who is leading the study, told German newspaper Der Spiegel that it would improve the debate about Universal Basic Income by producing scientific evidence that has not been available before.

"The debate about the basic income has so far been like a philosophical salon in good moments and a war of faith in bad times," he told the newspaper.

"It is — on both sides — shaped by clichés: Opponents claim that with a basic income people would stop working in order to dull on the couch with fast food and streaming services. Proponents argue that people will continue to do fulfilling work, become more creative and charitable, and save democracy.

"Incidentally, these stereotypes also flow into economic simulations as assumptions about the supposed costs and benefits of a basic income.

"We can improve this if we replace these stereotypes with empirically proven knowledge and can therefore lead a more appropriate debate."

A pro-basic income lobby group called Mein Grundeinkommen is funding the experiment. The group has used donations from its supporters to fund monthly €1,000 (R21,000) payments of for 668 people since 2014.

Finland experimented its with own form of Universal Basic Income for nearly two years between January 2017 and December 2018 but concluded that while it led to people out of work feeling happier, it did not lead to increased employment, the BBC reported. During the experiment, 2,000 unemployed Finns received €560 (R11,500) a month.

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