What are the impacts of universal basic income on mental health? A microsimulation economic modelling study

Description

Background/Objective
Studies have explored the relationship between the economy and children’s health and found that negative economic conditions adversely affect mental health in children. Our study modelled the impact of Universal Basic Income (UBI) - a largely unconditional, regular payment to all adult permanent residents to support people’s basic needs, and its impact on mental health and mortality in young people.

Methods:
We produced a discrete-time dynamic stochastic microsimulation that models a close-to-reality open cohort of synthetic individuals aged 14-24(starting at 90,000) between 2010 and 2030 based on data from Office for National Statistics, the Understanding Society Survey and UK Household Longitudinal Survey. Three UBI scheme scenarios were developed under Landman Economics Tax-Transfer Model (Scheme 1 – Starter (per week): £41 per child; £63 per adult over 18 and under 65; £190 per adult aged 65+; Scheme 2 – Intermediate (per week): £63 per child; £145 per adult under 65; £190 per adult aged 65+; Scheme 3 – Minimum Income Standard level (per week): £95 per child; £230 per adult under 65; £230 per adult aged 65+). These were tested in our modelling to project the cases of anxiety and depression, and deaths prevented or postponed, and cost savings under the counterfactual equivalised household income distributions.

Results
Over 20 years from 2020-2040, 200,000 (95% uncertainty interval 180,000 - 210,000) cases of anxiety and depression could be prevented or postponed in Scheme 1. This would increase to 420,000 (400,000 - 440,000) for Scheme 2 and 550,000 (520,000 - 570,000) for Scheme 3. UBI would lead to 110 (0 - 430), 320 (0 - 640) and 420 (100 - 770) deaths prevented or postponed for scheme 1, 2 and 3 respectively.

In total, £330m(£280m - £290m) in NHS and personal social services costs would be saved for Scheme 1 over 2010-2030 assuming 50% of cases diagnosed and treated, which are lower than that from Scheme 2 (£710 million[£640m - £790m]) or Scheme 3 (£930 million[£850m - £1000m]). Overall, the total cost saving would range from £1.5 billion(£1.2b - £1.8b) for Scheme 1 to £4.2 billion(£3.7b - £4.6b) for Scheme 3.

Conclusion and Policy Implications:
Our modelling suggests that UBI can have a significant benefit on the mental health of young people and that this will produce savings to the health system. Policy makers should consider the potential mental health benefits of UBI alongside other benefits including equity and wellbeing impacts.

Period	8 Sept 2023
Event title	Society for Social Medicine & Population Health
Event type	Conference
Location	Newcastle, United KingdomShow on map
Degree of Recognition	International