Participation Income

Introduction

Many of the philosophical objections to Basic income boil down to its unconditional nature. People dislike the something-for-nothing nature of the payment. Politicians and social theorists worry about a "dependency culture".

Participation Income attempts to address these concerns by proposing that payment should be restricted to people undertaking some form of socially useful activity: usually encompassing paid employment, those looking for work, the ill and disabled, voluntary work, and child or elder care.

Background

In Britain the idea of a Participation Income is associated with Tony Atkinson. He argues for a Participation Income which complements European social insurance based schemes. There should be two aims - to reduce the extent of means testing, and to link payment to active citizenship.

Means testing is opposed because it penalises personal effort - both of the recipient and their family, because the stigma attached to means tested benefits lowers take-up, and because means tests imply household- or family-based welfare systems - reducing individual independence.

The link to active citizenship reflects a desire to value productive activity which takes place outside of the marketplace and foster social capital - those networks developed through participation in the local community.

A range of other arguments have been put forward:

• it allows greater choice over hours of work - increasing the unemployed's chances of moving into work;
• through encouraging part time work it maintains mothers' contact with the labour market;
• as a non-means tested payment it should reduce the incentive to hide earnings and encourage honesty in the tax system;
• as a benefit paid to individuals it encourages independence - particularly for women.

However arguments against a Participation Income have included:

• while a PI should encourage some people to experiment with paid work it may discourage others as it removes the 'stick' of financial necessity (the 'income effect');
• the costs of introducing a PI will be borne by taxpayers in general - i.e. a PI comes at the cost of reducing their work incentives;
• PI also may be difficult to administer - requiring detailed monitoring of the range of activities which attract payment - checks would presumably be required to check people were actually volunteering or caring for other's children.

Further Reading

A.B. Atkinson, "The Case for a Participation Income", Political Quarterly, 1996 UK

A.B. Atkinson, "Beveridge, the National Minimum, and its Future in a European Context", London School of Economics STICERD WSP discussion paper 85, 1985 UK

Tim Callan, Cathal O'Donoghue, Holly Sutherland, and Moira Wilson, "Comparative Analysis of Basic Income Proposals: UK and Ireland", Microsimulation Unit, University of Cambridge, 1999 UK, Ireland

Robert E. Goodin, "Something For Nothing?", Boston Review, 2000, US, Australia

Carey Oppenheim, "Enabling Participation? New Labour's Welfare to Work Policies", Policy Network, 2001 UK

Sheila Shaver and Peter Saunders, "Two Papers on Citizenship and Basic Income", Social Policy Research Centre, 1995 Australia