Do young people want Universal Basic Income?

Do young people want Universal Basic Income? 2017-08-29T17:41:07+00:00

Around the world, experiments in universal basic income are taking place. The question of affordability has dominated much of the debate, but a focus on young people, as was proposed in the French presidential campaign, is important to examine.

It’s not so easy being young

The International Labour Office estimates that the unemployment rate for young people was 13% in 2016 − a new high representing 71 million people, with little prospect of improvement in 2017. As outsiders looking for jobs with limited professional experience, young people are at a serious disadvantage.

In recent years, the Great Recession has exacerbated the consequences of young people’s weak position on the labour market in terms of joblessness and the quality of work. Recent STYLE research has shown that policy responses towards young people have been inconsistent and at times incoherent, demonstrating an on-going reliance on reducing employment protection and limiting income protection (Smith and Villa 2016; Leschke and Finn 2016).

The impact of basic income on youth

A number of pilot studies around the world offer some evidence on how basic income schemes can impact the lives of young people. The effects on participation in education are particularly important – young people are more likely to complete their secondary-school education when the pressure to earn is eased. The effects regarding employment and entrepreneurship specific to young people, however, have not yet been studied.

According to a preliminary report, two subsets of young people were excluded from the recently launched experiment in Finland: students, because the trial was intended to study short-term effects on employment; and economically inactive young people, because their existing benefits are lower than those of adults over the age of 25 (Kangas 2016).

The fact that trials have not yet focused on young people suggests any policies aimed only at this group must be developed carefully. Yet the fact that there is a lack of evidence of the benefits of basic income for young people does not mean that those benefits are unlikely. Rather, this dearth can be traced to the fact that results of basic income studies for young people remain thin on the ground and any such results are likely to vary across groups. For young people, especially, these impacts may also emerge over a longer time period.

The challenges for youth in Europe and elsewhere

The characteristics of the labour markets of France and some other European countries create a number of challenges for young people. For those who drop out of school without an adequate qualification, access to work is difficult. While it is predicted that a universal basic income scheme might support young people’s decisions to forgo greater earnings in the short term, whether through third-level education or internships, apprenticeships and voluntary work, there are multiple reasons why people drop out. Furthermore, in countries with well-protected permanent contracts, like France, Spain and Italy, the segmentation between permanent and temporary contracts is perhaps the greater challenge facing young people.

Churning between short-term jobs is certainly a source of insecurity and precariousness, and it is especially prevalent among young people. This is a point highlighted in a French Senate report on basic income, which notes that only 44% of job transitions are direct, involving no period of unemployment between the two. Such vulnerable indirect transitions, it further notes, are concentrated among the young (Percheron 2016).

Being young is also about finding one’s way in life, and this group’s tendency towards short-term positions might be attributable, in part, to their exploratory approach to employment, whereby low-paying or ‘gig economy’ jobs are taken to meet short-term needs, to gain experience or to get a taste of a given industry. However, we can also see it as part of a wider trend in which job security is experienced by workers, alongside a rise in the frequency of retraining and periods without work (Eamets et al. 2016).

A universal or conditional income for young people?

One candidate in the French presidential election, Benoit Hamon, had proposed extending income support to young people under the title ‘universal income of existence’. Though only a first step towards a true, unconditional basic income, such a proposal could help those un- and underemployed young people who currently do not qualify for income support because means-testing is based on parental income.

A common worry is that providing a basic income for young people would, perhaps more than for other demographic groups, encourage worklessness and dissuade integration into the labour force, with severe long-term effects. In this light, a ‘participation income’ may seem more palatable.

A participation income would involve imposing conditions on the receipt of a basic income – for instance, that the young person would have to commit to performing voluntary work in their community, pursue training or take steps to establish a business. An immediate difficulty is that the definition of such participation could be problematic. Furthermore, administration of such a conditional scheme would involve expenses that may outweigh any increase in participation relative to an unconditional scheme.

A Dutch experiment, known as Know What Works, is planned for later in 2017 and will go some way towards answering this question by investigating the relative expense of various conditional and unconditional benefits.

A 21st-century solution for 21st-century youth?

As the nature of working life changes, it seems fair to say that workers will need to be agile and ready for retraining and new opportunities. Those people entering the labour market with limited experience bear the brunt of this new reality and the associated risks. Addressing these risks is one core argument for basic income – a secure floor that does not require form filling and applications each time one falls below an income threshold. Such an approach could make sense for young people in a world of job uncertainty and flexibility.

References

Eamets, Raul, Miroslav Beblavý, Kariappa Bheemaiah, Mairéad Finn, Katrin Humal, Janine Leschke, Ilaria Maselli and Mark Smith. 2015. Mapping Flexibility and Security Performance in the Face of the Crisis. STYLE Working Paper WP10.1 Mapping flexibility and security performance in the face of the crisis

Kangas, Olli. 2016. From Idea to Experiment: Report on Universal Basic Income Experiment in Finland. Kela Working Paper 106. Helsinki: Kela. https://helda.helsinki.fi/bitstream/handle/10138/167728/WorkingPapers106.pdf?sequence=4

Leschke, Janine, and Mairéad Finn, 2016. Tracing the Interface between Numerical Flexibility and Income Security for European Youth During the Economic Crisis. STYLE Working Paper WP10.1a Tracing the interface between numerical flexibility and income security for European youth during the economic crisis

Percheron, Daniel. 2016. Le Revenu De Base En France: De L’utopie à L’expérimentation. Rapport d’information no. 35. Senat. http://www.senat.fr/rap/r16-035/r16-035_mono.html

Smith, Mark, and Paola Villa. 2016. Flexicurity Policies to Integrate Youth before and after the Crisis. STYLE Working Paper WP10.4 Flexicurity Policies to integrate youth before and after the crisis