Unconditional Endowment and Acceptance of Taxes: A Lab-in-the-Field Experiment on UBI with Unemployed

Tena Estrada Blanca () and Luong Nhat
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Tena Estrada Blanca: Department of Microeconomics, 9178 University of Kassel , Nora-Platiel-Straße 4, Kassel, Germany
Luong Nhat: Department of Microeconomics, 9178 University of Kassel , Nora-Platiel-Straße 4, Kassel, Germany

Basic Income Studies, 2024, vol. 19, issue 2, 307-333

Abstract: A universal basic income (UBI) would be a guaranteed income floor for both the employed and the unemployed, from which economic theory predicts a gain in bargaining power and a disincentive to work. For high earners, the increase in taxes necessary to fund this program would decrease their motivation to earn. To assess these aspects, we conducted a lab-in-the-field experiment at a State Employment Service office in Spain. The unemployed participants received either an initial unconditional endowment, framed under the logic of the solidarity condition of UBI (UBI treatment) – to examine the taxes’ effect – or as a participation fee (FEE) or no initial endowment (NONUBI). Subsequently, they faced one default randomized task from a set of four paid real-effort tasks. To study bargaining power, they could change the task up to three times and/or skip all tasks and conclude the experiment. In the FEE treatment, they yielded the highest earnings. While we did not find a statistically significant difference in earnings between the FEE and the NON-UBI treatments, the UBI differed from the NON-UBI and FEE. A likely reason could be a crowding-out of motivation by the pressure to reciprocate without believing in other participants’ deservingness of the UBI. In addition, the results reveal that females change tasks more frequently than males.

Keywords: universal basic income; lab-in-the-field experiment; real-effort experiment; labor supply; prosocial behavior; house money effect (search for similar items in EconPapers)
JEL-codes: D64 J2 O21 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/bis-2023-0003

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