The characteristics of universal basic income

Debates on automatisation in work, inequality, and the increase in non-typical work and gaps in social security have accelerated the discussion around universal basic income. Basic income has also been interpreted as a transitionary tool for sustainable development.

During the last few decades, the debate on universal basic income has evolved through pilot studies and experiments, follow-ups, and evaluations, for example, in Canada, Finland, Kenya, the Netherlands, Switzerland, Uganda, and the United States, as well as at a regional level and cities such as Berlin, Barcelona, and California, among others (Hiilamo, Reference Hiilamo2022). In Finland, evaluations on a basic income experiment (2017–2018) suggested that basic income increased individuals’ autonomy and their positive expectations for the future (Blomberg-Kroll et al., Reference Blomberg-Kroll, Jauhiainen, Kanerva, Kangas, Komu, Kroll, Lassander, Niemelä, Simanainen, Tuulio-Henriksson and Ylikännö2019). Participants in the experiment experienced significantly fewer health problems and less stress than those in the control group. Yet, basic income had no positive impact on labour force participation (Verho et al., Reference Verho, Hämäläinen and Kanninen2022). In an exhaustive study regarding basic and minimum income schemes and their micro- and macro-economic effects, Muffels (Reference Muffels2021) found that positive and negative outcomes varied from one country and experiment to the next, thus suggesting that the benefits of basic income are context specific. For instance, in Europe, both positive labour market outcomes and positive effects on health and subjective well-being – such as less stress and anxiety – were observed with the introduction of a basic income scheme. In Europe, the effects on labour supply were mostly insignificant, while a study in Canada and the United States evidenced negative labour supply effects. Moreover, elevated positive expectations about the future and decreasing levels of poverty and inequality have been correlated with basic income experiments (Muffels, Reference Muffels2021).

There are several approaches to universal basic income (Standing, Reference Standing2005; Van Parijs and Vanderborght, Reference Van Parijs and Vanderborght2017; Sloman, Reference Sloman2018; Gentilini et al., Reference Gentilini, Grosh, Rigolini and Yemtsov2020; De Wispelaere and Morales, Reference De Wispelaere and Morales2021, Spies-Butcher et al., Reference Spies-Butcher, Phillips and Henderson2020; Thompson, Reference Thompson2022). During the pandemic, one approach to universal basic income was emergency basic income, which was introduced as an urgent response and as a solidarity scheme to protect vulnerable groups in society. According to De Wispelaere and Morales (Reference De Wispelaere and Morales2021), emergency basic income offers immediate cash assistance. It covers not only those working in standard employment but also offers urgent income support to the self-employed, the precariously employed, and those with care responsibilities. One of the advantages is that it boosts purchasing power to kick-start depressed domestic sectors of the economy. Furthermore, concerning the distribution of benefits, emergency basic income involves essential decisions related to targeting, means testing, eligibility, and continuity (one-time payment or not) (De Wispelaere and Morales, Reference De Wispelaere and Morales2021).

The Basic Income Earth Network (BIEN) defines universal basic income as being a periodic cash payment, unconditionally delivered to all on an individual basis, without any means test or work requirement (Van Parijs and Vanderborght, Reference Van Parijs and Vanderborght2017). We used this ideal type of definition as an analytical tool to analyse how novel direct payments share characteristics with ideal type of UBI.

Research design

This comparative study explores novel direct payments that thirty-eight OECD countries provided during the pandemic. This study used two data sets. First, we used real-time data on social protection measures complied by Gentilini et al. (Reference Gentilini, Almenfi, Orton and Dale2022) and data from our own dataset (Mäntyneva et al., Reference Mäntyneva, Ketonen, Peltoniemi, Aaltonen and Hiilamo2021) with follow-up by July 2023 and expanded to include all OECD countries. The criteria for including the new direct payments and for the analysis were the following:

1. 1. New benefit; one-time payments or periodic payments due to COVID-19 pandemic.

2. 2. The new benefit covered at least two or more social security beneficiary groups, or more than one group (e.g., unemployed) or all in need in society.

Many countries delivered one-off payments on a universality basis to families with children (e.g., Germany, Iceland) or new-borns (like in Slovenia), students (e.g., Slovenia, Japan, Canada) and seniors (e.g., Canada), or bonuses to the people receiving the last resort benefits or other social benefits (e.g., one-off payments to receivers of the solidarity income in France or Beneficiary of Greek Social Solidarity Income). (See Gentilini et al., Reference Gentilini, Almenfi, Orton and Dale2022.) These amendments to the existing benefits or one-off payments to one beneficiary or age group in society were excluded. Also, benefits to certain occupational groups or sectors were excluded.

Secondly, it was analysed if these measures continued and whether they formulated new path creations during the pandemic. This was analysed by gathering research material if novel direct payments continued and were modified in the period from 2020 to July 2023. The dataset includes the content, coverage, size (amount of the payments), and timing of the measures.

The key question concerning this was what has happened to the periodic or one-off payments since they were first decided on. Path creations start with trajectories, continuing their development, and might change direction or speed of change until leading to the path clearing or ending (Garud et al., Reference Garud, Kumaraswamy and Karnøe2010; Hogan et al., Reference Hogan, Howlett and Murphy2022). The third step in the analysis was a comparison of the benefits to the basic income dimensions. The analytical framework comparing the characteristics of the universal basic income is presented in Table 1.

Table 1. Framework for the comparison to the characteristics of the (universal) basic income

The comparison of the novel direct payments with the basic income was conducted within five dimensions: universal/targeted/all in need, periodic/one-off, individual/family, means-tested or not, and the question of work requirements (job-related conditionality). Payment delivered ‘to all’, or the value of universality, can be interpreted in many ways. We refer to universality as the opposite of selective criteria such as income and wealth.

Individuality is also one of the characteristics emphasised in universal basic income. In our interpretation, the benefit is paid directly to the person, not to one family member or the head of the household. Individuality also refers to non-means testing in a way that spouses’ incomes affect benefit levels. Universal basic income is paid without a means test. A means test can reduce, deny, or raise the benefit level based on the beneficiary’s income during a certain period (i.e., a parent’s or a spouse’s income can affect the benefit level).

Unconditionally means there are no obligations or any need to meet criteria to be paid this benefit. In contrast, means-testing in social security usually means that incomes (also in the same household) affect the benefit level or amount of the benefit. Practically, all social security benefits have a conditionality like an obligation to be a citizen, have residence rights (or residential permit), and to have a social security card and a bank account. Not having sanctioning or work requirements have been one principle to favour universal basic income. Direct payments can be delivered in many ways, such as via bank transfers and wire transfers, with debit cards and via cheque. Also, it usually refers to liquidity and transferability.

Novel direct payments in eleven OECD countries

In total, thirteen one-off or periodic novel direct payments implemented during the COVID-19 pandemic beyond traditional categories in eleven countries: Australia, Chile, Colombia, Denmark, Israel, Italy, Japan, Spain, South Korea, the United Kingdom, and the United States from all OECD countries. Table 2 demonstrates these findings.

Table 2. Novel direct payments in times of pandemic

Sources: Gentilini et al., Reference Gentilini, Almenfi, Orton and Dale2022; Authors: data compiled from national and international open sources 2020 – 6/2023 (Mäntyneva et al., Reference Mäntyneva, Ketonen, Peltoniemi, Aaltonen and Hiilamo2021).

When the pandemic began in early 2020, the first welfare states to respond with novel direct payments were Italy, the United States, Japan, South Korea, Chile, and Australia. Following the onset of the pandemic in March 2020, the Italian government proposed extending pensioners’ basic income (first adopted in 2019) to people outside social safety nets, thus creating a new national social security system, the citizen’s basic income. The citizen’s basic income was created to replace the previous conditional benefit programme. In practice, this meant simplifying the criteria for entitlement to benefits and removing the conditions for active labour market policies, which had proved both costly and inefficient. There was still a need to secure the income of citizens not eligible for payments. That is one reason the new emergency income, Reddito di Emergenza, was implemented in spring 2020.

In the same month, the United Kingdom decided to make a non-taxable one-off payment to all people receiving either the working tax credit or child tax credit but were not eligible to receive the working tax credit because their incomes were too high. The one-off payment delivered in April was approximately 580 euros (GBD 500).

In turn, the United States introduced one-time stimulus payments for individuals. Families as tax filers received a one-time tax credit, the exact amount of which depended on household size and income. The payments were reduced for individuals with an adjusted yearly gross income greater than EUR 70,000 (USD 75,000).

In Japan, all residents were granted tax-free cash payments to promote solidarity against the COVID-19 pandemic. These cash payments were individual in theory, but they were delivered to the head of the household. In South Korea, emergency relief payments were paid to all households. The size of the support varied according to family size. The South Korean support package was extensive, totalling EUR eleven point seven billion euros, accounting for more than 3 per cent of annual public spending in South Korea. In practice, novel direct payments were delivered in cash, transferred on debit/credit cards, or given as gift certificates for local markets. In South Korea, the government initially decided to exclude the highest-earning 30 per cent of the population from this benefit. However, the scope of the beneficiaries was later extended to include all households. Instead, the government campaigned to encourage the rich to donate their share to help maintain employment and support those who had lost their jobs. In Australia, one-off payments were delivered to several social beneficiary groups in March 2020. Furthermore, the new Coronavirus supplement was introduced in Australia for six months. The new income transfer consisted of various social beneficiary groups: recipients of the Jobseeker payment, parenting payments, youth allowance, and other payment types.

In turn, in Chile, a new transitory transfer programme, the Ingreso Familiar de Emergencia, was introduced in May 2020, paid to households dependant on informal work. It was directed to all households dependant on informal work for their livelihood, and originally continuity was planned for a maximum of three months. Colombia also introduced a new unconditional cash transfer system (Ingreso Solidario) for about three million citizens. The pre-existing social assistance system was based on scoring vulnerabilities (zero to 100) that gave eligibility for certain benefits. However, there were people in need without financial support from traditional systems. Most of these people were informal workers and their families (Lopez, Reference Lopez, Milan, Trere and Masiero2021).

In Denmark, the government decided on a non-recurring income transfer, the so-called lump-sum benefit, in May 2020. The transfer benefited a considerable number of inhabitants, a total of two point two million people (including almost 40 per cent of Danes) and was paid in October. In Spain, a new minimum income scheme was introduced as a regular part of the social security system in June 2020. The planning for this scheme had started before the pandemic, but the pandemic accelerated its implementation. Having been used at the regional level for years, the new minimum income scheme had long history. Previously, these programmes had varied widely from one autonomous region to another regarding coverage, scope, and regulation. The differentiation in the schemes was reflected in regional inequalities, affecting vulnerable groups. As was suggested in evaluations conducted on the regional system, the new programme was at the national level to lessen the inequality in the system.

In the middle of June 2020, Israel introduced the ‘Grant for every citizen’ plan. First, one-off payments were planned on a universal basis. Later, people with the highest incomes (over EUR 180 000 per year) were excluded, and more support was directed to those in most need and large families rather than to everyone. For instance, a single family member was eligible for a EUR 146 one-off payment. Moreover, new migrants, people with disabilities, and victims of terrorism received the augmented grant.

Situational novel direct payment paths

Secondly, we analysed path creations, if novel direct payments continued, and if they were modified when the pandemic period lengthened. Seven of the eleven countries – Australia, Chile, Colombia, Italy, Japan, South Korea, and the United States – that introduced novel direct payments continued them, which indicated that new social security paths were developed even if they had not been planned in the first place. In addition, the new minimum living income scheme in Spain is an example of an integral and permanent part of the social security system continuing as open-ended.

The Australian government delivered one-off payments three times: in March and December 2020, and continued once in March 2021. The Coronavirus supplement, as part of the stimulus package, was extended twice: first at the end of the year 2020 and then on 31 March 2021. In Chile, families who received the sixth payment of the Ingreso Familiar de Emergencia benefit received as an extension, extra monetary support in four phases (approximately EUR fifty eight) starting in December 2020. Extension to the novel direct payments continued until December 2021. During the pandemic, payments were targeted at various vulnerability levels based on income. Firstly, the benefit was directed to 90 per cent of the most vulnerable households, then during the first three months of 2021, 60 per cent, and in April 2021, 80 per cent of the most vulnerable households and the amount of direct payments depended on the number of household members. From June until November 2021, benefits were distributed universally to all people in the Social Registry of Households (RSH), except in September, when amount of financial support was 50 per cent corresponding to previous contributions. Also, in Colombia, the Solidarity income benefit was extended firstly in March 2020 until June 2021, and then in June 2021, the benefit was extended again until August 2021. After that, the benefit was extended once more until December 2023, at which time the benefit will be reassessed.

Italy’s emergency income was extended three times: in November and December 2020; in March, April, and May 2021; and in June, July, August, and September 2021. The so-called economic impact payments (four rounds) in the United States were not initially periodic or continuous payments. Instead, the implementation was planned as a one-time payment based on the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). When the pandemic continued, new initiatives and agreements followed. The second round of the economic impact payment was delivered as a new one-off payment in December 2020. After that, a decision on a further two payments was made simultaneously. Additional novel direct payments were made in March 2021.

New path creations of novel direct payments also emerged in Asian countries. In 2020, South Korea established emergency relief benefits for all households to stabilise the livelihoods of people suffering from COVID-19 pandemic and to increase consumption. The benefits were paid nationwide to nearly twenty-two million households, regardless of the level of their income. Direct payments were distributed on debit/credit cards or as gift certificates for local markets, and they were valid for a limited period, from fourth of May 2020 until first of August 2020, to support the local economy. In 2021, a second grant was directed to all residents, excluding the wealthiest 12 per cent, covering more than twenty million households. The distribution of financial relief packages intensified the ongoing public debate on basic income, as the lump-sum cash payments drew gratitude as well as a backlash from critics regarding the populist economic strategy and demands for targeted support (Park, Reference Park, Greer, Massard da Fonseca and Peralta-Santos2021: 115). In Japan, cash payments were continued in spring 2021, not on a universal basis, but targeted at households with children.

In Denmark, the government decided to implement one-off payments due to the COVID-19 pandemic. The Danish government granted a non-recurring income transfer (lump-sum benefit) in December 2020 to a substantial number of inhabitants (two point two million), covering almost 40 per cent of Danes. Although direct payments were targeted, they were aimed at several traditional risk categories. Most of the recipients of social security benefits received one-time direct support.

In what follows, we have assessed the above-discussed direct payments through characteristics of universal basic income.

Comparison to the characteristics of universal basic income

Finally, to answer to our main research question and deepen our analysis, we analysed the similarities between novel direct payments and the characteristics of an ideal type of (universal) basic income. As shown in Table 3, we compared the direct payments with the universal basic income through five dimensions: universal-targeted, periodic-one-off, individual-family, means-tested or not, and the question of work requirements and job-related conditionality. The dimensions met with universal basic income are marked in grey in Table 3 and discussed next.

Table 3. Novel direct payments in times of pandemic and universal basic income – characteristics

Sources: Gentilini et al., Reference Gentilini, Almenfi, Orton and Dale2022; Authors: data compiled from national and international open sources 2020 – 6/2023 (Mäntyneva et al., Reference Mäntyneva, Ketonen, Peltoniemi, Aaltonen and Hiilamo2021).

In Japan and South Korea, the ideal-type principle of universality was met with direct payments. Also, one-off payments in Israel have been interpreted as nearly universal, excluding only about 2 per cent of high-income earners and people who had not filed an obligatory tax return for 2018. In the United States, stimulus payments were delivered to almost half the population. In Denmark, direct payments covered almost 40 per cent of the population. In Chile, Colombia, and Australia, benefits were periodic. Otherwise, direct payments were one-off payments, some of which were continued. In turn, minimum vital income in Spain is an open-ended scheme that has been described as one of the universal basic income features.

The benefit given to each household member or individual is one characteristic of the ideal type of universal basic income. Most of the income transfers were paid to individuals.

Almost one-third (five out of thirteen) of the measures met the ‘no means test’ as universal basic income criteria. One-off payments in Australia, Denmark, Japan, and South Korea were made without considering the income or wealth of the recipients. Alternatively, the minimum income in Spain, the emergency payments in Italy, and the advance payments and stimulus payments in the United States, were all conditioned on certain income levels. For example, in Italy, to be eligible for emergency income, the income during the previous month had to be lower than the amount of the benefit. In addition, other specific criteria were used as a threshold (such as residence in Italy), and payments were calculated with an Equivalent Economic Situation Indicator (ISEE). Recipients of this income could not obtain other emergency income transfers at the same time.

As highlighted in Table 3, the universal basic income has no work-related conditionality (i.e., criteria that must be met to be eligible for the benefit). In our OECD country sample, despite the obligation to register as a jobseeker in order to be eligible for the minimum living income scheme in Spain, the novel direct payments we studied did not include stringencies related to work. However, in Colombia particularly, informal workers and their families received Solidarity Income.

Conclusive discussion

Our study firstly explored the novel direct payments introduced during the times of the COVID-19 pandemic. Secondly, we examined whether these payments were extended and modified and thus formulated new path creations, at least temporally. Thirdly, these direct payments were compared to the ideal-type characteristics of universal basic income, to answer our main research question.

To conclude, most OECD countries did not introduce novel payments. Eleven OECD countries provided novel direct payments (in total thirteen) during the COVID-19 pandemic. Our data included empirical evidence on the benefits paid in Australia, Chile, Colombia, Denmark, Israel, Italy, Japan, Spain, South Korea, the United Kingdom, and the United States. Firstly, financial support was one-off or periodic payments combined with more than one social beneficiary or group in society: Australia, Denmark, the United Kingdom, and the United States. Secondly, countries provided benefits in accordance with needs: Italy, Spain, and thirdly inclusive benefits to all (or to nearly all) in society: in Japan and South Korea.

From a path-creation perspective, seven one-off or periodic benefits in seven countries (seven of eleven) – Australia, Chile, Colombia, Italy, Japan, South Korea, and the United States – were extended during the pandemic. Also, the conditionality of direct payments changed in some cases, like in Chile’s Ingreso Familiar de Emergencia, demonstrated gradual transformation of the novel benefits (e.g., Garud et al., Reference Garud, Kumaraswamy and Karnøe2010). According to our study, continuity was more probable than interrupting financial aid in the early phases of the pandemic. However, most of the novel payments due to COVID-19 had ended by June 2023, and at least in current situation welfare states and institutions have returned to the status quo within novel direct payments due to COVID-19. There are two exceptions: Citizen Income as an incremental transformation from Solidarity Income in Colombia, and Minimum Vital Income as permanent benefit in Spain are in use. These are examples of how a crisis can accelerate transformations with innovative social security instruments and an example of path-creation, with changed eligibility criteria that transform the social security system eventually (Garud et al., Reference Garud, Kumaraswamy and Karnøe2010; Hogan et al., Reference Hogan, Howlett and Murphy2022). Albeit most of the new direct payments have ended, it is not however excluded option that increased interest towards UBI, and policy learning and lessons from crisis resilience policy from COVID-19-time policy would not lead reforms in the near future.

Furthermore, we compared the novel direct payments with universal basic income ideal-type characteristics. The universality dimension of universal basic income was met in payments in Japan and South Korea, and to a greater extent, in Israel. Also, one-off payments to several social beneficiary groups in Australia and Denmark were targeted but shared other characteristics of universal basic income. Notably, in the United States, the stimulus payments were cut only for those with relatively high incomes. Overall, all new direct payments shared some commonalities with ideal type of universal basic income and could be interpret quasi-basic income.

In COVID-19 context, practical solutions basic income have been diverse with emphasis on emergency help to people in need (e.g. De Wispelaere and Morales, Reference De Wispelaere and Morales2021; Leisering, Reference Leisering2021). They have compromised between universality and targeting (e.g., Spies-Butcher et al., Reference Spies-Butcher, Phillips and Henderson2020) when combining new benefits with more than one traditional beneficiary group. Our study suggests that Extra Emergency Income in Italy, Solidarity Income in Colombia, and The Ingreso Familiar de Emergencia emergency relief payment in Chile are examples underlining the emergency features of UBI.

Furthermore, novel direct payments have been considered to be an innovative approach to universal basic income. One advantage of basic income that has been highlighted has been the chance to use it in a range of ways. For instance, in South Korea, where the universal basic income criteria were met mostly in one-off payments during the pandemid. Already in year 2006, novel direct payments were implemented within the targeted group of young adults. These measures were based on the idea of universal basic income, and the key idea was to prevent poverty and to help young adults in a weak labour market situation in which most young adults were still living with their parents (Moon and Soohyung, Reference Moon and Soohyung2020).

Within our study scope, the Minimum Income in Spain was the only example of a benefit that had work related conditionalities such as an obligation to be registered as a jobseeker; otherwise, direct payments did not include job related eligibility criteria. During the pandemic, several countries, such as Italy, eased these eligibility criteria. Another concern has been government spending as using too much money as a remedy in the middle of a crisis. To balance public revenues was one reason for gradual transformation of the Solidarity benefit into Citizen Income during the COVID-19 in Columbia. The Citizen Income is currently under development and evaluation (Acuña Gómez et al., Reference Acuña Gómez, Jiménez-Barbosa and Hernández Monsalve2023). Surprisingly, rises in social transfers to households compared to 2019 have been more moderate in OECD countries, with few exceptions, in liberal and southern European countries. In most countries, expenditure increases in 2020 have declined and in one-third of countries, they are now at the same levels as before the pandemic. (Data gathered from OECD-social transfers to the household longitudinal dataset, 2019-2022.)

Our empirical findings showed that many direct payments combined benefits in new ways within traditional risk pooling to current social beneficiary groups like in Australia (see Thompson, Reference Thompson2022). In Denmark cash transfers were vertical, topping up the already existing benefits. These can also be interpreted as new social policy measures with new benefit combinations.

One-off or periodic cash transfers beyond traditional risk categories like unemployment or sickness are an option for decision makers to answer to meet several purposes: to prevent poverty and help people to cope with an income decline due to the COVID-19 pandemic and with emphasis on economic stimulation at the society level. These novel direct payments were used in greater or lesser advanced welfare states. The governments replied with a massive battery and variety of measures to protect income losses and jobs. Rising public expenditure and finance also caused concern, particularly for poor households. A recent microsimulation study from Germany provided evidence that the one-off payments for children and short-time schemes have been especially effective in cushioning the income loss suffered by the poor (Christl et al., Reference Christl, De Poli, Hufkens, Peichl and Ricci2022). This is one of the crucial research topics for future studies.

One-off payments have been shown to be easy tools for governments trying to perfect efficiency. Alternative approaches to universal basic income also resonate from different practical and scientific fields. Emergency basic income in times of crisis refers to public health policy with appropriate targeting and prioritising, even at the legislative level (e.g., Lynch, Reference Lynch2020). At the same time, grounding principles of social policy are based on equal rights for benefits or services and social justice representing an ideal-type uniform and (flat-rate) universalism. Political reality during the pandemic has shown that, to an increasing extent, most one-off cash handouts have been a question of prioritisation. If new benefits can meet various new needs, it might create a window of opportunity for basic income in the future. South Korea is one example of an OECD country in which the interest in developing universal coverage of social security is cited around the world.

The scope of this article also raises the question of how crisis-resilient and sustainable social security is in advanced economies. Even direct payments, to some extent overlapping with other social benefits, can be signs of the inadequacy of current benefit levels. This aspect was limited to this study but might be interesting for future studies. Another limitation of this study was that we did not compare COVID-19 transfers to the possible universal basic income benefit levels related to the purchasing power that has also been one of the purposes behind COVID-19 transfers. Because the purpose of universal basic income is not to increase the incomes of high-income earners, the idea is to reform the tax system, whereby the increase brought by the basic income is recovered from the well-earners through taxation. Also, a variety of approaches have been suggested. What can also be learned from these social transfers is that despite the national decision-making and social security systems, the same instruments have been used. Thus, our finding demonstrates the convergences of means in social security across OECD countries during times of pandemic.