This blog is based on an article in the Journal of Social Policy. Click here to access the article.
The Swiss basic income referendum of 2016 and the Finnish basic income experiment of 2017-2018 attracted considerable attention worldwide, and recently a growing number of researchers and policy makers are considering universal basic income (UBI) schemes as a possible alternative to alleviate the risks workers in precarious employment face in the post-industrial labour market.
In addition, as the COVID-19 pandemic has caused mass dismissals and lay-offs, UBI has received public attentions in many countries that do not provide adequate social security for workers. In a recent study, we shed light into how precarious work and unemployment benefit generosity affect workers’ opinion on the introduction of UBI schemes in European welfare states.
To analyse the effects of precarious work, we focused on four precarious worker groups: part-time workers, temporary employees, low-skilled service employees, and solo self-employed workers. We expected that part-time workers and temporary employees would be more likely to favour UBI schemes than full-time workers and permanent employees for the following reasons.
First, part-time positions and temporary employment tend to increase income and job insecurity, and people in these types of work often have difficulties when accessing social security benefits, such as unemployment benefits and pension as a result of frequent unemployment or limited working hours.
Second, because of such economic insecurity they can express stronger tendencies towards the expansion of redistribution, and exclusion from the social safety net can motivate their desire for restructuring the existing social security systems.
On the other hand, we predicted that being solo self-employed or a low skilled service worker would not make a difference in workers’ preferences for UBI schemes. First, low-skilled service employees would be less likely to demand the reorganisation of social protection than other types of precarious workers, because they can generally qualify for all welfare benefits unless they are on a fixed-term contract or in a part-time position.
Second, solo self-employed workers’ negative attitudes towards welfare policies may neutralise their favourable impressions towards UBI, which can come from their economic vulnerability and low level of social protection.
Today, information about the specifications of UBI schemes is vague and debates on the topic are still underway in all European countries. In this uncertain situation, people are likely to favour stability over change and try to avoid losses over acquiring possible gains. Therefore, we assumed that workers would be reluctant to support the introduction of UBI schemes if they feel that the current level of unemployment benefit is satisfactory. Otherwise, it is possible that they would be in favour of the new system.
To measure the effect of unemployment benefit generosity, we used three indicators: the replacement rate (the extent to which unemployment benefits replace recipients’ income from employment), the payment duration (the period for which unemployment benefit is paid to an unemployed person) and the qualifying period for unemployment benefit (the period of employment or the contribution required to gain entitlement).
To check if our expectations were correct, we analysed a dataset combining the ESS Round 8 Data (2016), which was dedicated to the theme of welfare attitudes, and other data including country-level variables from multiple official statistical sources. Our analysis was targeted at respondents in paid work and between the ages of 15 and 64 years in 21 European countries that participated in the survey, excluding Israel and Russia.
We found that amongst the four types of precarious work, only temporary employment is associated with stronger UBI preferences, while the other precarious positions do not have a significant impact. The findings about part-time workers were different from what we expected. They might worry that receiving a UBI could lead to counterproductive tax effects, because they are less likely to be the main breadwinners in their households and may be working part-time voluntarily to achieve a better balance between work and family.
When it comes to unemployment benefit generosity, we found that the more generous unemployment benefits are, the more they tend to undermine the popularity of UBI. Our analysis showed that increases in the net replacement rate and payment duration reduce UBI popularity, while increase in qualifying period leads to higher support.
The findings of our study demonstrate that temporary employees could become powerful proponents of UBI schemes due to not only job uncertainty and income insecurity but also inadequate protection by existing social security systems. In addition, workers in countries that provide less generous unemployment benefits are more likely to favour UBI. Therefore, we can expect that as fixed-term employment becomes more dominant in the post-industrial labour market, the demand for UBI would increase, unless social security systems are improved to protect temporary workers and the unemployed. Welfare states should proactively attempt to respond to such a demand.
About the authors
Young-Kyu Shin is a PhD candidate and researcher at the Faculty of Social Sciences, University of Helsinki.
Teemu Kemppainen is a Senior Lecturer in Urban Geography at the Department of Geosciences and Geography, University of Helsinki.
Kati Kuitto is a Senior Researcher at the Finnish Centre for Pensions.