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The Who and the Why? Selection Bias in an Unconditional Basic Income Inspired Social Assistance Experiment

Part of the Contributions to Economics book series (CE)

Abstract

It is well documented that it is important to take selection effects into account when analysing social experiments. A Randomised Controlled Trial (RCT) design usually prevents selection bias, but not when participation is voluntary. Despite the abundance of literature on the existence of selection bias, few studies provide in-depth insights on how these selection effects take place in practice, and what causes different groups to be over—or under-represented. Nijmegen is one of a number of Dutch municipalities that conduct an experiment with the social assistance system, loosely inspired by the Universal Basic Income (UBI). Participants receive their allowance with less conditions, and get the opportunity to earn additional income. In this chapter, selection effects are tested, using registry data of participants and all non-participants in the population. In addition, qualitative data are used to interpret the selection effects we find. Several characteristics turned out to increase or decrease participation: education, country of origin, being single, having an exemption of the obligation to work, and part-time work providing additional income. Further, we propose that stress is an important deterrent for people to participate in an experiment like this, even when the experiment is aimed at (among others) stress reduction, like the one in Nijmegen.

Keywords

  • Social assistance
  • UBI-related experiment
  • Selection bias
  • Mixed methods
  • Randomised controlled trial

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Notes

  1. 1.

    An overview of these arguments can be found for example in Bregman (2014) , the same line of argumentation can be found in the proposals by local politicians, e.g. Westerveld (2015) for Nijmegen.

  2. 2.

    Ontario’s basic income pilot SeeAlsoSeeAlsoExperiment(s) will end on March 31, 2019 (Jeffords, 2018; https://globalnews.ca/news/4422214/ontario-basic-income-pilot-end/). The Finnish basic income experiment has ended on December 31, 2018 (see De Wispelaere, Halmetoja, & Pulkka, 2018 ).

  3. 3.

    For example, the Ontario experiment was based on voluntary participation as well.

  4. 4.

    Mainly the data in the registry of the WerkBedrijf (the local reintegration organisation) and the data of the department Zorg & Inkomen (Care & Income) of the municipality.

  5. 5.

    All Dutch laws can be found at the website wetten.overheid.nl

  6. 6.

    These amounts are for 2019.

  7. 7.

    The central poverty line of the Netherlands Institute for Social Research (Sociaal en Cultureel Planbureau, SCP) (for a single person € 1063 in 2014) is based on having an income which is ‘not much but sufficient’ and includes what is considered necessary to eat, live, buy clothes and take part in social activities.

  8. 8.

    This was later also internationally released as ‘Utopia for realists’.

  9. 9.

    For those interested, Betkó (2018) gives an overview of this, and the broader context – it is only available in Dutch though.

  10. 10.

    Under normal rules, a person on social allowance is allowed to keep 25% of money earned through work, up to a maximum of € 200 per month, for a maximum of 6 months. In the experiment, participants are allowed to keep 50%, up to a maximum of € 200 per month, for the entire duration of the experiment which is 22 months.

  11. 11.

    The city council voted for the proposal to experiment with a large majority.

  12. 12.

    In Nijmegen, as well as in the other municipalities that held similar experiments.

  13. 13.

    The Werkbedrijf is engaged in job placement and reintegration. It is an administrative-regional association of municipalities, social partners (employers and trade unions) and the UWV (Uitvoeringsinstituut Werknemersverzekeringen; Employee Insurance Agency).

  14. 14.

    This could also be seen as a specific form of randomisation bias, where participants in a specific group (often the control group) are participating less in the data gathering (Smith, 2000). In this case, the randomisation process leads to selective drop out; to perceive this process is more important than the exact labelling, be it drop-out or randomisation bias.

  15. 15.

    See Sect. 6.4.1 for reasons behind this choice in design.

  16. 16.

    This only goes for the national tax allowances. On the local level, the municipality of Nijmegen considers a person on social assistance as eligible for local arrangements.

  17. 17.

    And (thus) neither a ‘couple’.

  18. 18.

    Single person 70%; two persons each 50%, total 100%; 3 persons 43.33% each, total 130%; 4 persons 40% each, total 160%; 5 persons 38% each, total 190%, etc.

  19. 19.

    Labyrinth Onderzoek & Advies, Utrecht.

  20. 20.

    The experiment ends on October 1, 2019.

  21. 21.

    This might seem quite a wide range, but it is good to keep in mind that the number of people on social assistance is never stable; people enter and exit the scheme every day. For example, both the entire population of people on social assistance and the target population for this experiment differed at the time of the first and the second wave (December 2017 and March 2018).

  22. 22.

    We are not able to do this fully. For example, the assessment on whether or not the re-integration trajectory an applicant was already receiving was a barrier for participation, was done on a case by case basis by a professional. It was not done based on a list of criteria that could be used to reduce our population.

  23. 23.

    In the evaluation of the experiment, we will be able to use data of Statistics Netherlands (Centraal Bureau voor de Statistiek, CBS) instead of the municipality, which is much more accurate.

  24. 24.

    Following the definition of Statistics Netherlands.

  25. 25.

    This is based on the experience the municipality has with social assistance duration. Under 1 year, people have reasonable chance to find a job. Between 1 and 3 years, it gets more difficult, and once somebody is on social assistance for longer than 3 years, the chance of leaving it due to finding a job is very small.

  26. 26.

    The transcripts of the interview and the documents provided by the research bureau can be consulted at request. For this, contact the authors.

  27. 27.

    According to the Natural Persons Debt Restructuring Act (Wet schuldsanering natuurlijke personen, Wsnp) Dutch municipalities are obliged to help their residents with problematic debts. The main objective of the Wsnp is to offer (financial) perspective to individuals in a desperate financial situation as a result of debts.

  28. 28.

    Survey data show that advocates of UBI may vote for the introduction of UBI because they favour the concept and want to stimulate the discussion, but are well aware that there are downsides too (see Delsen & Schilpzand, Chap. 3).

  29. 29.

    One recruiter mentioned people had bad experiences with additional income. Having income in addition to an allowance is something that notoriously often goes wrong. This can lead to people losing their allowance , or having to repay tax allowances over a year after receiving them. For people on the subsistence minimum, this has grave consequences. It is not farfetched to assume that people who have experienced this once, will not be very eager to participate in an experiment with additional income.

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Acknowledgements

This project was possible due to the municipality of Nijmegen, which instigated, organised and funded the experiment; the European Commission, who generously contributed by means of an ESF-SITS grant; and the Ministry of Social Affairs (SZW), who gave permission to deviate from the Participation Act and provided assistance in practical ways.

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Correspondence to János Betkó .

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Betkó, J., Spierings, N., Gesthuizen, M., Scheepers, P. (2019). The Who and the Why? Selection Bias in an Unconditional Basic Income Inspired Social Assistance Experiment. In: Delsen, L. (eds) Empirical Research on an Unconditional Basic Income in Europe. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-30044-9_6

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