Shifting ‘Basic Income’ from Pilot Projects to Policy

Shifting ‘Basic Income’ from Pilot Projects to Policy

Greg Notman

There is much hope and enthusiasm for the idea of a basic income around the world and, close to home, the Basic Income for Care Leavers in Wales Pilot is supporting 500 young people leaving care with an income of £1280 (after tax) per month for three years. However, as research by the International Public Policy Observatory (IPPO) shows, there are still key gaps in the evidence base which may partly explain why this policy is rarely being taken up by national governments or on a large scale. As a national government, the Welsh Government is an outlier in leading a basic income trial, although its own trial is small-scale and targeted.

In December 2022, the Wales Centre for Public Policy held a half-day conference about the Welsh pilot, and its evaluation, attended by academics and policy experts from Wales, the UK, and internationally. Its aim was to ensure that in tandem with its evaluation of the pilot, the Welsh Government draws on the best available research evidence about basic income schemes and wider support for care leavers. 

I’d like to highlight five key points about evaluating basic income schemes which emerged from our conference, also drawing on work about basic income schemes by colleagues at the International Public Policy Observatory.  

  1. We need to move beyond traditional measures of ‘work’ in order to truly understand the impact of a basic income. Critics of basic income schemes often claim that a basic income disincentivises work, though it is argued that evidence from previous pilot schemes does not support this. Evaluations of many basic income pilots focus on traditional measures of labour market participation, including wages, hours worked, and contract types. Educational outcomes, including participation in lifelong learning, are much less frequently measured, despite basic income often affording the security for recipients to reskill or engage in educational programmes. In July 2022, the Senedd voted in favour of calling for the Welsh Government to extend the basic income pilot to aid a just transition to net zero, providing the opportunity for workers in emissions-intensive industries to develop new skills and obtain jobs in emerging sectors. Given that basic income offers a platform for recipients to develop new skills, measuring labour market activity alone fails to provide a full picture. 

Recipients may also choose to use their basic income to change career, volunteer, become an entrepreneur, or improve their work-life balance. This may involve reducing their hours in their current job to set up a business or increase the amount of time spent with their family. These are likely to improve subjective well-being, and while entrepreneurship is a commonly measured outcome of basic income pilots, this remains less commonly evaluated than the number of hours worked.  A basic income may also allow those in creative industries to devote more time to these, potentially replacing secure income obtained through full- or part-time work. Ireland is currently piloting a Basic Income for the Arts, which may provide more insight into the effects of basic income for less formal forms of labour, helping to overcome gaps in evidence on basic income which are a key barrier to long-term policy change. 

  1. ‘Not everybody wants a goat… I’m the only one who knows what I really need.’ A basic income aims to tackle poverty by boosting people’s financial resources. While most financial support available for people in poverty in the UK is conditional or means-tested, principally Universal Credit, there is no conditionality to a basic income and recipients can spend their money as they wish. Evidence from other pilots around the world highlights the freedom afforded to recipients as a key benefit of basic income: this is highlighted by quote above, from an Australian documentary on GiveDirectly’s work in Kenya.
  1. Our speakers highlighted that a basic income can improve well-being by increasing the autonomy of recipients, reducing dependence on others. Yet, the financial security which underpins this autonomy has only been explicitly and formally evaluated in a few basic income pilot schemes. Basic income can provide increased financial independence for recipients, given the lack of means testing and non-conditionality, resulting in reduced reliance on family members for money and increased financial security. Financial dependence is cited as a fundamental barrier to escaping abusive relationships, with basic income providing the potential to overcome this: evidence from the B-MINCOME pilot in Barcelona highlighted that some women were able to use their basic income to gain independence and leave abusive partners. 

Moreover, as part of research by the Royal Society of Arts, young people highlighted that a basic income could ease interpersonal tensions caused by financial dependence on parents, and better teach young people how to manage their own money. Especially for young adults who have moved out of the family home, financial dependence on parents was seen to undermine independence and self-esteem, and result in feelings of guilt when spending money. A basic income would offer the opportunity to reduce this financial burden. 

WCPP’s work on poverty in Wales highlighted the mental load and burden which people in poverty often experience through struggling to ‘get by’ and manage the cost of living, with this stress and anxiety exacerbated by the current welfare system. Reflecting the relationship between poverty and poor mental health, evidence from the pilot in Barcelona highlighted reduced stress and improved intra-family relationships, demonstrating the potential for a basic income to improve individual mental well-being and personal relationships.

  1. When evaluating basic income pilots, it is important to consider which outcomes are most important to recipients. The outcomes which are evaluated as part of basic income trials tend to be pre-determined before the beginning of a scheme. However, understanding which outcomes matter to participants, and understanding whether basic income has an impact on these outcomes, is crucial to understanding the impact of basic income schemes. Subjective measures of wellbeing feature in the majority of evaluations of basic income schemes, and improvements in wellbeing – which is increasingly prioritised by policymakers in Wales – have been found to be significant in several basic income pilots. Unpacking what constitutes this improvement in wellbeing can help address questions about the impact of a basic income; doing this rests on evaluating what participants consider to be important. 
  1. The success of the Welsh pilot and its evaluation will rely on effectively engaging with, but not overburdening, a small number of participants. Care leavers, who are the participants of the Welsh pilot, are already a highly ‘researched’ group, and being able to evaluate the pilot successfully without overburdening participants was a key question discussed at our event. There is currently limited evidence on what interventions work to support young people transitioning from care, and the pilot offers the opportunity to consider this question as well as those relating to basic income schemes. Ethics and safeguarding are extremely important for any research but need to be navigated especially carefully when involving such a small group of often vulnerable people, such as care leavers. As such the planned evaluation design for the Welsh Pilot includes methods which aim to balance participant interaction with the use of existing administrative data. 

For further information about the event and a full summary, click here.