A three-year research project in Germany explored the potential effects of a universal basic income by providing 122 participants with €1200 each month.
The initiative, which began on June 1, 2021, was designed to understand how such a financial boost might influence people’s daily lives. Out of around 2 million volunteers, these 122 were selected, with another group of 1580 participants acting as a control group, providing data without receiving any payments. The research was conducted by the German Institute for Economic Research (DIW Berlin) and aimed to compare the lives of both groups.
While the study produced scientifically valid data, researchers pointed out that the results are unlikely to provide groundbreaking insights into the broader debate on universal basic income. This is mainly because the study focused on individual-level impacts rather than broader macroeconomic effects like inflation or state funding consequences.
However, the findings offered some intriguing observations. Most notably, the participants who received the €1200 monthly payments did not spend the majority of the money. Instead, they saved an average of €447 more each month than the control group. The recipients allocated €233 per month toward consumption, €76 to support family and friends, €44 to compensate for a decrease in income if they worked fewer hours, €16 in donations, and €384 on unspecified expenses.
Interestingly, the study found that the recipients did not significantly reduce their working hours or income. Their behavior was largely similar to the control group, but they reported higher levels of life satisfaction, especially regarding their sleep, health, income, and leisure time. Despite these improvements, they did not spend more time on education, sports, or volunteer work, but did dedicate more time to socializing with family, friends, and partners.
The project, funded by around 200,000 private sponsors, was coordinated by the nonprofit organization Mein Grundeinkommen e.V.
