New Study Reveals €1,200 Basic Income Boosts Wellbeing Without Reducing Work

Calls to Replace Citizens’ Income with Universal Payments Gain Momentum

Germany is once again debating the future of its welfare system. As dissatisfaction with the current Bürgergeld system continues—some argue it is too generous, others say it imposes degrading conditions—experts and social organizations are reviving a long-discussed alternative: the unconditional basic income.

A new report from the German Institute for Economic Research (DIW) proposes replacing current social welfare structures with a monthly universal basic income of €1,200 for every adult and €600 for every child, regardless of employment or social status. The idea is to eliminate bureaucracy and create a system that provides every individual with financial stability, freeing them from fear-based decisions and complex application processes.

Real-Life Experiment: No Drop in Employment

The Berlin-based organization Mein Grundeinkommen launched a three-year study, supported by researchers from DIW, the University of Cologne, Oxford University, and others. Between 2021 and 2024, 122 randomly selected participants received €1,200 every month—tax-free and without conditions.

Contrary to popular fears, none of the participants quit their jobs. Employment levels among those receiving the income remained almost identical to those in the control group. Instead of reducing their working hours, many used the financial support to pursue new opportunities, enhance their qualifications, or change jobs in search of more meaningful work.

For example, Bianca Radlbeck from Regensburg used the income to pursue studies in Munich before returning home to find a job better aligned with her interests. Another participant, Romy from Leipzig, launched a side business as an artist. Both credited the basic income for allowing them to take calculated risks without being forced into unsuitable or unstable work just to make ends meet.

Tangible Gains in Health and Financial Security

Participants in the basic income group consistently reported lower stress levels, improved sleep, and higher satisfaction with their lives and jobs. The study measured these effects not only through interviews and surveys but also through biological markers, such as hair samples to assess stress hormones.

Social interaction also increased. On average, recipients spent nearly four hours more per week engaging in social activities than those in the control group. Their overall wellbeing was reported to rise to a level typically seen after major life events such as marriage.

Financial behavior also shifted significantly. While many participants initially used the funds to fulfill long-delayed personal goals, most later transitioned toward saving or investing. The proportion of recipients with less than €10,000 in assets dropped from 27% to 13% over the study period, showing a clear trend toward improved financial resilience.

Financing Remains the Core Challenge

Despite the promising results, the question of funding such a program remains central. The study itself did not test a real-world implementation where existing social benefits are removed or taxes raised. Participants received the money in addition to their regular income, creating a best-case scenario.

However, Mein Grundeinkommen has published a financial calculator developed in partnership with DIW. According to their model, up to 75% of the cost could be covered by reallocating existing budgets. The remaining funds would require moderate increases in income tax, corporate tax, and the introduction of a financial transaction tax.

Their projections suggest that 83% of the population would financially benefit or see no change, while only 10% would contribute more.

Political Resistance and a Shift in Public Perception

Although some economists argue that capitalism’s adaptability already provides fairness without the need for such systemic changes, the study is prompting fresh discussion. Prominent figures such as Sabine Werth, founder of Berliner Tafel, and the late dm founder Götz Werner have long advocated for the unconditional basic income as a means of empowering citizens rather than fostering dependency.

Werth recently called for an end to the moralizing approach that frames welfare recipients as unworthy. She argues that greater social justice could be achieved either through bold experiments like basic income or through reforms that increase the responsibilities of the wealthiest.

The concept still faces skepticism from major political parties, which often see it as either economically impractical or socially unjust. But with evidence showing no decline in productivity and significant gains in mental and financial wellbeing, supporters hope the new data will shift the narrative from ideological debate to fact-based policy development.

In autumn 2025, Hamburg is expected to hold a public referendum on a pilot program for universal basic income. If successful, 2,000 participants will receive guaranteed monthly payments for three years, potentially moving Germany closer to what could become the most significant social reform in decades.