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Universal basic income and covid-19 pandemic

BMJ 2021; 372 doi: https://doi.org/10.1136/bmj.n193 (Published 26 January 2021) Cite this as: BMJ 2021;372:n193

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Rapid Response:

Re: Universal basic income and covid-19 pandemic

Dear Editor,

Basic income is a policy idea which has gained much support in recent years, now boosted even further by the experience of the pandemic. Patel and Kariel argue that basic income should be implemented to protect incomes and health during the pandemic and in the longer term. However, they make a number of errors in their summary of the evidence. Referring to a systematic scoping review of which I am the lead author, they state “A review of studies, focusing on the effects of universal basic income on health, was published in 2020. Twenty seven studies reported health benefits, including reduced mortality, improved adult health, and increased provision of nutrients for low birthweight infants.”

The review [1] included studies of schemes “similar to basic income”, as a universal basic income has never been implemented or evaluated. Only twelve of the included studies reported health outcomes, and several found null or negative effects. Two studies which reported effects on mortality found increases, linked to increased substance use. These negative effects come with substantial caveats, but overall the impacts were not exclusively positive.

Patel and Kariel also do not seem to employ a recognised definition of universal basic income. The definition widely recognised and used by scholars and advocates alike, is of:

“a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.” [2]

To meet the criteria for UBI, payments must be made to all citizens, without regard to other income and with no requirements to engage in employment-related activity or any other behavioural condition. The editorial refers to “Evidence from the many pre-existing universal basic income schemes”, but there are no schemes that meet the definition of UBI. Examples provided such as the new Spanish Minimum Living Income are means-tested and targeted at people in extreme poverty. The Finnish trial was also targeted at unemployed people, and many participants were subject to work requirements. The other systematic reviews referenced as evidence of positive impacts include both unconditional and conditional cash transfers [3] or conditional transfers only. [4] Employing Patel and Kariel’s implicit definition, effectively all social security programmes would be basic income schemes.

To understand the effects of a complex social intervention, it is crucial to be clear about what it comprises. The effects of an intervention which pays all citizens an equal amount, or without requirements to participate in employment, are likely to be very different from those of one which is targeted and/or conditional. Reporting and debate which employs incorrect definitions of basic income leads to misattribution of effects to entirely different interventions and hampers understanding of basic income’s potential impacts. Regardless of one’s opinion on the desirability or otherwise of basic income, it is essential that debate and decision-making on the topic are informed by accurate reporting of the available evidence, including its limitations.

Patel and Kariel observe that poverty has negative effects on health, and that reducing poverty can lead to health improvements. This is uncontroversial, but it does not constitute an argument for providing payments to all citizens regardless of income. In many studies included in our review, observed benefits were strongest in the most disadvantaged. Targeting payments at those on lower incomes may be more efficient than a UBI at improving health. As things stand, there is little evidence on the effects of universal payments, and evaluation of such an intervention in a UK context is required before definitive statements about the likely effects can be made.

Regarding arguments about the potential for unconditional payments to disincentivise employment, our review found that with some exceptions such as mothers of young children, unconditional cash transfers have small to modest effects on labour market participation. [1] There is also abundant evidence that targeted income supplements have positive impacts for people on low incomes, [5] while employment conditions and sanctions can have negative health impacts. [6] For this reason the recently extended £20 weekly increase in the Universal Credit Standard Allowance, which has limited the impact of Covid-19 on poverty in the UK, is extremely welcome. However, the reinstatement of sanction-backed work requirements at a time of rapidly increasing unemployment is unlikely to have positive effects.

The economic and health burdens of the pandemic have been very unequally distributed. For many outgoings have increased, but savings have grown among the better off, [7] while those who deliver essential services have faced much higher Covid-related mortality rates. [8] Given that many lower-income groups face a higher risk of unemployment when the furlough scheme ends, [9] and in the context of the already “inconceivable spending” highlighted by Patel and Kariel, it may be more equitable and effective to focus resources on those most in need. Retaining the UC uplift, increasing the Work Allowance, and loosening conditionality could fulfill many of the objectives of a UBI at a fraction of the cost. [10]

References
1. Gibson M, Hearty W, Craig P. The public health effects of interventions similar to basic income: a scoping review. The Lancet Public Health. 2020 1;5(3):e165-76.
2. Basic Income Earth Network. About basic income. Basic Income Earth Network. 2020 https://basicincome.org/about-basic-income/
3. Owusu-Addo E, Renzaho AMN, Smith BJ. The impact of cash transfers on social determinants of health and health inequalities in sub-Saharan Africa: a systematic review. Health Policy and Planning. 2018 33:5, 675-696.
4. Leroy J, Ruel M, Verhofstadt E. The impact of conditional cash transfer programmes on child nutrition: a review of evidence using a programme theory framework. Journal of Development Effectiveness. 2009 1:2, 103-29
5. Cooper K, and Stewart K. Does household income affect children’s outcomes? A systematic review of the evidence. Child Indicators Research. 2020 13:4, 1-25
6. Williams E. Punitive welfare reform and claimant mental health: The impact of benefit sanctions on anxiety and depression. Social Policy & Administration. 2020 55:1 157-72
7. Handscomb K, and Judge L. Caught in a (Covid) trap Incomes, savings and spending through the coronavirus crisis. Resolution Foundation. 2020
8. Office for National Statistics. Coronavirus (COVID-19) related deaths by occupation, England and Wales: deaths registered between 9 March and 28 December 2020. Office for National Statistics. 2021 https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/...
9. Trades Unions Congress. Young workers are most at risk from job losses due to the coronavirus crisis. Trades Unions Congress 2020
10. Gibson M. Would a basic income be the best response to the COVID-19 crisis? Policy Scotland. 2020 Aug; https://policyscotland.gla.ac.uk/would-a-basic-income-be-the-best-respon...

Competing interests: No competing interests

05 March 2021
Marcia Gibson
Research Scientist
MRC/CSO Social and Public Health Sciences Unit, University of Glasgow
Berkeley Square, 99 Berkeley St, Glasgow G3 7HR
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