UBI massively boosts well-being – Finland proves

[Tera, Jukka Maksimainen, James Manyika, and Navjot Singh, “An experiment to inform universal basic income,” McKinsey and Company, September 15, 2020, https://www.mckinsey.com/industries/social-sector/our-insights/an-experiment-to-inform-universal-basic-income, accessed June 25, 2023, GDS-LL]

A huge boost to well-being

However you read the findings on employment, other effects were clear: people on the basic income reported significantly better well-being on multiple dimensions. Average life satisfaction among the treatment group was 7.3 out of 10, compared with 6.8 in the control group—a very large increase. To experience a similar lift in life satisfaction, we estimate that a person’s income would need to go up by as much as €800 to €2,500 per month—60 to 170 percent of the average per-capita household income in the European Union. Indeed, the difference was big enough to erase the gap in life satisfaction between unemployed and employed people.

These significant positive findings on well-being are no mystery: the basic income seems to have improved all the major components of life satisfaction (Exhibit 2). People receiving the basic income reported better health and lower levels of stress, depression, sadness, and loneliness—all major determinants of happiness—than people in the control group. Recipients of the basic income also demonstrated more confidence in their cognitive skills, assessing their ability to remember, learn, and concentrate at higher levels than the control group did. And the basic income enabled people to perceive their financial situation as more secure and manageable, even though their incomes were no higher than those of people in the control group. Finally, basic-income recipients expressed higher levels of trust in their own future, their fellow citizens, and public institutions.

Exhibit 2

In the Finnish experiment, people on the basic income reported large and statistically significant improvements in key drivers of well-being.