$1,000-a-month universal basic income gets put to a test

Democratic presidential candidate Andrew Yang is putting his money where his mouth is: He's giving families $1,000 a month to promote his proposal for a universal basic income -- a recurring, government-funded stipend for all American adults with no strings attached.


The 44-year-old New York City entrepreneur turned presidential hopeful will distribute $1,000 of his personal fortune to one family in Iowa and one in New Hampshire -- the first two states on the presidential caucus and primary calendar -- every month this year to prove the efficacy of his so-called Freedom Dividend.

"This would enable all Americans to pay their bills, educate themselves, start businesses, be more creative, stay healthy, relocate for work, spend time with their children, take care of loved ones, and have a real stake in the future," Yang says on his campaign website.

A handful of countries including India, Canada, and most recently, Finland, have experimented with versions of a universal basic income (UBI), which some studies show help boost an economy and allow workers to find better jobs. Preliminary results from Finland's nationwide test show that it did not lead to gains in employment, but did improve beneficiaries' health and well being.

"On the basis of an analysis of register data on an annual level, we can say that during the first year of the experiment the recipients of a basic income were no better or worse than the control group at finding employment in the open labour market," said Ohto Kanninen, Research Coordinator at the Labour Institute for Economic Research.

But the handout reduced recipients' stress levels. "The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group. They were also more confident in their future and in their ability to influence societal issues," said Minna Ylikanno, Lead Researcher at social services agency Kela.

In the U.S., the Stockton Economic Empowerment Demonstration, or SEED, this month will begin testing a program in Stockton, California, that distributes $500 a month to approximately 100 residents -- making it the first American city to experiment with free money.

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