The Impact of Universal Basic Income on Labor Market Participation
Authors: Ssentongo Peter 
Published: March 2024

Purpose: This study sought to investigate the impact of Universal Basic Income on labour market participation.

Methodology: The study adopted a desktop research methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library.

Findings: The findings reveal that there exists a contextual and methodological gap relating to the impact of Universal Basic Income on labour market participation. Preliminary empirical review revealed the importance of considering both the short-term and long-term effects of Universal Basic Income (UBI) on labor market participation. While some evidence suggested that UBI may have led to modest reductions in employment rates, particularly among certain demographic groups or in specific contexts, the study recognized the broader societal benefits and trade-offs associated with implementing UBI policies. Additionally, the conclusion highlighted the need for nuanced policy design and implementation, considering UBI as a tool for promoting inclusive growth and addressing income inequality. Policymakers were urged to carefully consider the distributional effects of UBI and implement complementary social policies and institutional arrangements that support labor market participation. Overall, the conclusion underscored the complexity of the relationship between UBI and labor market participation, emphasizing the need for further research and experimentation to fully understand its potential effects and ensure its successful implementation.

Unique Contribution to Theory, Practice and Policy: The Behavioural Economics theory, Human Capital theory and the Economic Sociology theory may be used to anchor future studies on the impact of Universal Basic Income on labor market participation. The study provided comprehensive recommendations for policymakers, contributed to theoretical advancements in understanding labor market dynamics, and offered practical insights for the implementation of UBI programs. Policymakers were advised to carefully design UBI policies to balance promoting labor market participation and providing financial security, considering the diverse impacts on different demographic groups. The study highlighted the importance of addressing disincentives to work, promoting inclusive growth, and continuously monitoring and evaluating UBI programs to assess their long-term impact. Additionally, the study emphasized leveraging UBI as a tool for social equity and economic empowerment. Through these recommendations, policymakers were able to make informed decisions to enhance labor market outcomes and socio-economic well-being.

Keywords: Universal Basic Income (UBI), Labor Market Participation, Societal Benefits, Distributional Effects, Policy Design, Inclusive Growth