Originally published 2020-08-24.
Germany's best-known basic income experiment paid 122 people €1,200 a month for three years, with no conditions and no questions about how they spent it. Announced in August 2020 and run from June 2021 to May 2024, the Pilotprojekt Grundeinkommen compared those recipients with a control group of 1,580 people who received nothing. When the results came out in April 2025, the headline finding surprised many critics: the people who got the money did not work less.
It is important to be precise about what this was. Germany did not introduce a universal basic income, and the payments did not go to "citizens" in general. It was a privately funded research study with just over a hundred recipients and a much larger comparison group, designed to test a single question carefully. Here is how it worked, what it found, and what it can and cannot tell us.
How the study was set up
The project was organised by Mein Grundeinkommen ("My Basic Income"), a Berlin association that has raffled off year-long basic incomes funded by public donations for years. The research was run by the German Institute for Economic Research (DIW Berlin), with the Vienna University of Economics and Business and Germany's Institute for Employment Research (IAB) as partners. At launch, the DIW economist Jürgen Schupp was named as its lead researcher.
The key design features were:
- Who took part: people aged 21 to 40, with monthly net incomes between €1,100 and €2,600. That is, mostly working people on low to middle incomes, not the unemployed.
- The payment: €1,200 a month, roughly what many people in Germany need to stay above the poverty line, paid on top of existing income for three years.
- The comparison: 122 recipients and 1,580 control participants with similar profiles, all filling in regular questionnaires.
- Funding: the money came from private donations collected by the association, not from the state.
Why the idea gained ground in 2020
The study was announced in the middle of the first COVID-19 wave, when governments were spending heavily to keep people in work. Germany relied on its short-time work scheme (Kurzarbeit), which it kept extending for the sectors hit hardest. In the UK, the furlough scheme was due at that point to end in October 2020. It did not: it was extended six times and finally closed on 30 September 2021, having supported millions of jobs.
That crisis made unconditional payments look less like a fringe idea. Supporters argued that a basic income could cushion shocks from pandemics and from automation, cut red tape by dropping means tests, and give people the security to retrain or take risks. Prominent backers included Jack Dorsey, then chief executive of Twitter, who funded US income pilots.
Critics raised equally serious objections. A national scheme would be very expensive, it might reduce the incentive to work, and it would not by itself fix the structural causes of low pay and unemployment. Schupp described the public debate at the time, in an interview with Der Spiegel, as being "like a philosophical salon in good moments and a war of faith in bad times." His point was that both camps leaned on stereotypes, and that real data could replace them.
What the results showed
The findings, published on 9 April 2025, focused on several areas:
- Work: recipients did not quit their jobs or cut their hours. About 90% kept working roughly 40 hours a week, much like the control group.
- Saving: recipients put aside more than a third of the extra money, about €779 a month on average, roughly double what they would normally save.
- Well-being: the study reported clear gains in life satisfaction and mental health, along with better sleep and more leisure activities.
- Autonomy: recipients reported acting more independently in decisions about work and life, and they did not spend the money only on themselves.
The DIW said the results challenge the picture of a "lazy" society in which people stop working once their basic needs are covered. The project itself noted that not every expectation was confirmed: the payments changed people's attitudes and feelings less than some supporters had hoped.
What this study can and cannot tell us
The results are encouraging for basic income supporters, but they come with limits worth understanding:
- Small and specific group. 122 recipients is enough to detect big effects, not small ones. The participants were young adults in work, so the results say little about families, older people or the long-term unemployed.
- Time-limited. Everyone knew the money would stop after three years. People may behave differently with a payment they expect to receive for life.
- No taxes to pay for it. A national basic income would have to be financed through taxes or cuts elsewhere. A donor-funded study cannot capture how those costs would change behaviour across the economy.
- No neighbourhood effects. When only a handful of people in a city receive money, prices and wages do not shift. In a nationwide scheme they might.
None of this makes the study less useful. It answers one narrow question well: whether a reliable monthly payment makes ordinary employed people stop working. In this group, it did not.
How it compares with other trials
The German findings fit a pattern seen elsewhere. In Finland, 2,000 unemployed people aged 25 to 58 received €560 a month from 2017 to 2018, with no reduction if they found work. Employment barely changed, but recipients reported less stress and more confidence about the future. The government did not continue the scheme.
In Stockton, California, 125 residents received $500 a month from 2019, mostly spending it on groceries and bills. In Kenya, the charity GiveDirectly began a long-running programme in 2016 covering around 20,000 people in 195 villages, and recipients fared better on food security and health during the pandemic. An Ontario pilot that began in 2017 was cancelled by a new provincial government in 2018 before it could finish.
In Germany, public support has remained substantial: a 2022 YouGov poll found 55% in favour of a universal basic income. Yet the current German welfare system, while generous by international standards, is tied to strict conditions and does not meet the definition of a basic income.
The takeaway
The Pilotprojekt Grundeinkommen did not prove that a universal basic income would work for a whole country, and it never claimed to. What it did was test a common fear, that free money makes people idle, under careful conditions, and find no sign of it among the people studied. That moves the debate from slogans towards the harder practical questions of cost, design and who should receive such a payment.
Sources: Pilotprojekt Grundeinkommen (DIW Berlin and partners); The Brussels Times, 9 April 2025: Those receiving basic income do not work less; Wikipedia: Universal basic income in Germany; Wikipedia: Universal basic income pilots; Wikipedia: Coronavirus Job Retention Scheme.
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