Basic income doesn’t work, Antwerp research suggests


The study, led by a poverty specialist, showed that giving all working-age citizens a basic wage actually increased poverty and had only a minor effect on inequality

Redistribution of wealth

A basic universal income causes poverty to rise and does little to redress inequality, according to a study by the University of Antwerp.

The research was led by economist Ive Marx, who specialises in poverty and the distribution of income. His team simulated the introduction of a monthly basic income of €700 for all citizens aged between 18 and 64 in the Netherlands, based on the country’s minimum wage. Under-18s received €165.

The study found that introducing such a system would cost about €94 million and would have to be funded by increasing taxes and cutting various benefits such as unemployment and child allowance. These measures would result in at least three quarters of 18- to 64-year-olds losing out financially; 30% would lose more than a tenth of their income.

Redistribution via basic income appears to reduce inequality slightly, but the simulation showed that poverty levels increased by 3 percentage points. The research concluded that countries with well-developed welfare systems like Belgium and the Netherlands would lose more than they gained by introducing a basic income.

“There is lots to be said for a basic economic law, given the growing inequality in prosperity. But handing out cash doesn’t seem to be the best way,” said Marx, the head of the university’s sociology department, in De Standaard. “Proponents of the system must show why it is superior. You would have to be almost crazy to introduce it.”

Universal basic income is a welfare programme in which all citizens receive a regular, unconditional sum of money from the government. High-profile trials have recently taken place in Finland, India and Canada.

Photo: Getty Images/Spyderskidoo