Monday, March 12, 2012


A Canadian $1 coin, for those of you unfamiliar. Source.


I recently learned about a study performed by the Canadian government in the 1970s which is incredibly interesting and yet comparatively unknown.  Information appears to be sparse, but I wish to tell you what I've found.  It's rather interesting, and could have dramatic positive consequences.  The best I think I can do for now is to link you to the Wikipedia article, which I assume will grow and change as more information is published.

Mincome is the name of a project set in motion by the governments of Canada and Manitoba.  The objective to see what consequences a guaranteed annual income (GAI) would have on a given workforce.  The payment of the GAI would be reduced by some fraction for every dollar earned by a family.  It was assumed, I would say fairly, that without a pressing economic incentive to work, many people would simply choose not to do so.  However, this is why we experiment, for hypotheses are still just guesses.

While some families were offered the GAI payments in larger urban centers like Winnipeg, one site was chosen as an "isolated" experiment.  This was the town of Dauphin, Manitoba.  All ten thousand people, including seniors and those unable to work, were offered a GAI.  This strict universality was key to the experiment, as nationwide GAI policies had been suggested beginning in 1971.  It would seem that theoretical examinations had suggested GAI would be beneficial to a nation struggling with poverty.  The project began around 1974 and continued to 1979, when funding was cut due to a pressing economic crisis.

The results were interesting, to say the least.  First however, think about this for a moment.  If you were guaranteed not a good, but a living wage to do nothing, what would you do?  If the results from Dauphin are to be believed, around 98% of you would choose to work.  The male workforce shrank by a mere 1%, along with reductions of 3% for wives, and 5% for unmarried women.  However, these numbers are not just uniform reductions.  This was a time when secondary school diplomas were not as widespread as they are today.  In rural communities where labour was required on the farm, teenage boys would often choose the farm over grade 12 due to financial concerns.  Married women which left the workforce often did so when a child was born.  This departure from the workforce was not permanent as far as I know, but women did choose to stay at home longer with their child or children.

It is also important to note that a host of benefits resulted from the GAI experiment.  Health care costs were reduced by 8.5%.  One article on the subject (to which I have lost the link), mentioned that a large fraction of hospital visits could be considered medical consequences of poverty.  This was in part due to a reduction in work related accidents, fewer car accidents and fewer instances of domestic abuse.  It has also been speculated that without the economic disincentives, people who were sick would choose to recover more completely before returning to work.  I would also hazard a guess that a host of stress-related illnesses decreased, but I can only guess.

After the project's cancellation in 1979, the information was gathered together, boxed up, and not considered again until relatively recently.  It would seem that the GAI experiment resulted in a happier and healthier workforce.  My [limited] knowledge of psychology would suggest that this results in higher quality work and lower crime rates.  I certainly look forward to learning the results of the detailed reviews of the data.  And frankly, I think the social and economic benefits could potentially outweigh the costs, particularly when Canada pays for the health care of its citizens.


P.S.  I've been working 12 hour night shifts, and haven't the time for proof-reading.  Please be kind.