Basic Income: Research Disproves Expectations

Does basic income cause people to work less? Or does it instead enhance life satisfaction and individual freedom of choice? New research findings show that many widely held assumptions about the negative effects of an unconditional basic income do not withstand empirical scrutiny.

In a large-scale randomized controlled trial conducted in Germany, researchers examined over a three-year period how a monthly unconditional basic income of €1,200 affects labor supply, well-being, and life decisions. The study was co-led by Susann Fiedler, Professor of Behavioral Economics and Decision Research at WU Vienna University of Economics and Business.

Little Withdrawal from the Labor Market

Contrary to the frequently expressed concern that people would quit their jobs or substantially reduce their working hours, when receiving an unconditional income, Susann Fiedler explains in an interview on Welthandelsplatz 1, WU Vienna’s knowledge podcast, the evidence-based findings of her study: The vast majority of participants remained in paid employment. There was neither a significant increase in part-time work nor evidence of a general withdrawal from the labor market.

“The idea that people automatically stop working once they are financially secure is deeply ingrained, but our data does not support it,” Fiedler explains.

In fact, both the public and academic experts substantially overestimated the expected labor supply effects prior to the experiment.

Higher Life Satisfaction and Better Mental Health

At the same time, the results show significant positive effects on life satisfaction, mental well-being, and perceived autonomy. Financial security enabled participants to make more deliberate decisions, for example regarding career choices, further education, or personal life planning.

Most notably, these effects persisted even after the payments ended. More than one year later, around 80% of the positive effects on well-being and decision-making freedom were still detectable.

Autonomy as a Key Mechanism

A central finding of the study concerns the role of autonomy. Rather than incentivizing inactivity, the basic income strengthened participants’ sense of self-determination. Many reported that simply knowing they had a financial safety net improved their bargaining position at work and reduced stress.

“Even the option of being able to leave, if necessary, changes how people experience their work,” says Fiedler. This sense of freedom had positive effects on mental health, perceived meaning, and long-term life planning.

Potential Broader Societal Benefits

The findings suggest that a basic income could also generate broader societal effects, such as reduced strain on health care systems, more stable employment trajectories, and increased investment in education and training. At the same time, the feared loss in productivity did not materialize.

Evidence Over Intuition

The study also highlights how strongly public debates are driven by intuition rather than evidence. The actual effects of a basic income were both overestimated (regarding labor withdrawal) and underestimated (regarding realistic gains in well-being).

“Especially in morally charged debates, empirical research is essential to move beyond ideological positions,” Fiedler emphasizes.

Outlook: New Models Under Discussion

Based on the results, the researchers also discuss alternative designs, such as time-limited basic income phases over the life course that could be flexibly used for further training, caregiving responsibilities, or personal crises. Such models could strengthen autonomy without permanently altering existing welfare systems.

Overall, the study makes an important contribution to current debates on the future of work, social security, and individual freedom of choice.

Further Information and Links

• Podcast Episode 2: „Does Universal Basic Income Make People Lazy?“(in German)

• About Susann Fiedler

Susann Fiedler is a behavioral scientist and Professor of Behavioral Economics and Decision Research. She received her PhD in psychology from the University of Erfurt. Her research focuses on the design of decision-making contexts and organizational environments, examining how situations and problems are mentally represented and how these representations change. Additional research interests include motivation, discrimination, cooperation, and the reproducibility of research.

• Host: Axel Spörk

Angelo Spörk spent five years working as a presenter, editor and programme producer in radio in Austria and Germany, as well as in the creative department of a Viennese fintech start-up, before studying business law at the Vienna University of Economics and Business. At the Institute for Sustainability Management, he specialises in communicating complex academic content and is responsible for professional communications for our EU projects.

• Studies

Bernhard, Sarah; Bohmann, Sandra; Fiedler, Susann; Kasy, Maximilian; Schupp, Jürgen; Schwerter, Frederik (2025). Basic Income and Labor Supply: Evidence from an RCT in Germany.
CESifo Working Paper No. 11940. Available at SSRN or DOI.

Bernhard, Sarah; Bohmann, Sandra; Fiedler, Susann; Kasy, Maximilian; Schupp, Jürgen; Schwerter, Frederik (2025). Cash transfers, mental health and agency: Evidence from an RCT in Germany. Deutsches Institut für Wirtschaftsforschung, DIW Discussion Papers No. 2129. Available at  

• Welthandelsplatz 1. The Knowledge Podcast of WU Vienna

How do global developments shape our everyday lives? Based on new scientific insights, researchers at WU Vienna discuss key issues from different perspectives and show how global dynamics affect individual daily life.

New episodes are released monthly on Spotify, Apple Podcast, YouTube, Webplayer, and wherever podcasts are available.

Press Contact

WU Vienna University of Economics and Business
Science Communication
Mag. Christina Maria Bachmaier
christina.bachmaier@wu.ac.at