Can Money Buy Happiness? A Look at UBI and Mental Health

Illustrated by Eugenia Yoh

In an age when 7.1 percent of U.S. adults have had at least one major depressive episode and an estimated 31 percent of U.S. adults will experience any sort of anxiety disorder within their lives, it seems like our country has accepted the presence of mental illness as the new normal. With the ongoing pandemic, these numbers are certainly not in a position to improve. However, there is a policy proposal that has the potential to decrease the amount of Americans afflicted with mental illness and burdened by stress: Universal Basic Income (UBI). 

A UBI program ensures a set amount of money to constituents, without a cutoff level for certain income levels. If UBI was enacted in America, everybody from minimum wage workers to Jeff Bezos would receive a payment. Andrew Yang, former 2020 Democratic presidential candidate, touted the Freedom Dividend proposal, which promised a $1000 per month payment to all American citizens ages 18 and older (1). Before Andrew Yang, the concept of UBI was also championed by Martin Luther King, Jr. and Thomas Paine, is in effect in Alaska and almost passed under the Nixon administration.

In April of 2020, many households across America received stimulus checks of $1200 in light of the ongoing COVID-19 pandemic. The money was part of the CARES Act, a stimulus package implemented by the federal government to provide financial support to both citizens and corporations across America due to the economic turmoil caused by the pandemic. However, the one-time stimulus checks only put a band-aid on a festering wound of growing income inequality and deteriorating mental health in America. A UBI program would go further in solving these problems. 

Enacting a UBI plan in the United States would be a large undertaking, though the PEW Research Center has reported that it is no longer considered a controversial proposal in the U.S., as nearly a majority of Americans would support enacting a UBI.  There are obvious pros and cons to establishing a UBI in America. Still, it is important to acknowledge that UBI has vast potential to diminish health inequities and improve mental health for citizens.

While there is no major country that has implemented a permanent UBI program, several countries and organizations have conducted UBI pilots to examine the policy in action. Many have found a positive link between the cash transfers and the health of the recipients. For instance, Finland conducted a country-wide UBI experiment from November 2017 to October 2018 (2). When analyzing the effects of the UBI on mental health, the study found that survey respondents who received the basic income treatment described a more positive well-being, better mental health, more positive perception of economic wellbeing and higher level of trust in other people and societal institutions as compared to the control group.

Beyond general feelings, UBI programs can lower actual cases of injury. An article by Beck, et. al analyzed a randomized cluster UBI trial that was conducted in India in order to understand the relationship between a basic income and potential health benefits (3). The study examined minor illnesses and injuries, illness and injuries requiring hospitalization and child vaccination coverage. The study found that minor illnesses and injuries dropped by 46 percent for those receiving the basic income over the course of the study, with no marked change in major illness or vaccination rates, the latter of which was already high. 

Two studies examined cash transfer programs (a similar concept to UBI) in Africa, with focus on mental health and food security. One study, an analysis by Ebenezer Owusu-Addo of Cash Transfer programs in Sub-Saharan Africa, found significant mental health improvements, including increased self-esteem and reduced stress and anxiety (4). The study also found a consistent positive effect on food security across all cases. Another paper examined the impact of a Child Support Grant on the mental health of South African adults using the CES-D, a mental health assessment, to quantify their results. While not the exact same as a UBI plan, the study still analyzes the effects of cash influx to families. Data showed “a positive and statistically significant direct effect of the cash transfer on mental health…” (5).

Beyond improving mental health and lowering injuries, a UBI program could help prepare future generations for healthy lives. An article by Herbert Jauch in the Global Labour Journal summarized findings from a Basic Income Grant trial in Namibia, conducted in 2004 (6). The research team monitoring developments found that poverty, child malnutrition and school drop-outs had fallen significantly within the year. In addition, crime rates dropped and women were able to become more economically dependent. 

One of the most remarkable UBI trial programs took place in the Canadian town of Dauphin in the 1970s. An article by Anthony Painter published in The BMJ analyzed the results of the trial, which demonstrated a correlation between UBI and improved health benefits (7). Not only did mental health treatment, mental health diagnoses and general hospitalizations fall during the study, but the positive effects vanished after the trial ended. 

It is clear that enacting a UBI program would take the first steps towards addressing mental health issues and general health inequities in the United States. With the extra money in pocket, Americans would be better equipped to provide themselves with proper nutrition. Citizens would also have the mobility to seek out health services when needed, rather than staying home for fear of the cost. Americans would develop an increased sense of financial security, reducing the stress induced by worrying over the month’s bills. 

We should not accept the new normal of our mental health situation in the United States. Encourage your local representatives to support enacting a UBI program in the US or your town (check out Mayors for a Guaranteed Income). In a world full of complicated problems, sometimes the simplest solution is giving people cash. 

Edited by: Haleigh Pine
Illustrated by: Eugenia Yoh

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