Basic Income in a Small Town: Understanding the Elusive Effects on Work

This paper examines the impact of a guaranteed annual income experiment from the 1970s called the Manitoba Basic Annual Income Experiment (Mincome). We examine Mincome’s ‘saturation’ site located in Dauphin, Manitoba, where all town residents were eligible for payments. Would people work less if their basic needs were guaranteed outside the market? Never before or since the Dauphin experiment has a rich country tested a guaranteed annual income at the level of an entire town. A community-level experiment accounts for the fact that people make decisions in a social context, not in isolation. Using hitherto unanalysed data we find an 11.3 percentage point reduction in labour market participation. 30 per cent of that fall can be attributed to ‘community context’ effects. Additionally, we show that withdrawals were driven by single-headed households. Participants who provide qualitative explanations for work withdrawals typically cite care work, disability and illness, uneven employment opportunities, or educational investment.