Universal basic income and kids: The financial push to parenting

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  Quantumrun Foresight
• June 20, 2024

Insight summary

Universal Basic Income (UBI) is catching the world's attention as a potential tool to tackle various socio-economic challenges, including the critical issue of declining birth rates. Experiments in the US have demonstrated positive outcomes, suggesting that a regular, unconditional income might encourage families to grow. The exploration and proposed implementations of UBI in different countries are sparking a vital discussion on how financial security could reshape decisions about family planning and overall economic stability.

UBI and kids context

Universal Basic Income (UBI), a concept where individuals receive a regular sum of money from the government, is gaining traction globally as a potential solution to various socio-economic issues, including declining birth rates. In the US state of Alaska, the Permanent Fund Dividend, a form of UBI funded by oil revenues, has positively impacted birth rates. According to a 2022 study by Washington University in St. Louis researchers, there was an approximate 8 percent increase in birth rates in Alaska following the UBI payments.

Meanwhile, in South Korea, the Democratic Party of Korea is exploring the introduction of a nationwide UBI scheme. The proposal includes distributing an annual UBI of 1 million won (approximately $840) to every resident, with additional benefits for youth and rural residents. The proposal reflects a growing recognition of UBI's capacity to support citizens beyond mere economic survival, aiming to enhance overall quality of life and potentially influence demographic trends, such as encouraging higher birth rates. South Korea is famously known to have the lowest birth rate in the world.

By providing a permanent and long-term financial safety net, UBI can reduce economic barriers to family planning, such as healthcare and childcare costs, especially for low-income households. The success of Alaska's program and the prospective implementation in South Korea show that financial policy tools can support demographic stability. Many governments (including China, Singapore, Japan, and South Korea) are already offering family subsidies, but the adoption remains low because this short-term financial assistance is not enough to combat inflation and economic slowdown.

Disruptive impact

With a guaranteed income, people may feel more secure in starting or expanding their families, knowing they have a financial cushion regardless of employment status. This security could lead to a more stress-free environment for raising children, where parents are less consumed by economic worries and more focused on providing quality time and care. Additionally, the ability to cover basic living expenses could empower individuals to pursue further education or vocational training, potentially leading to better job opportunities and improved living standards for their families.

Companies might see increased consumer spending, as individuals have more disposable income, boosting demand for products and services across various sectors. This trend could encourage businesses to invest in expansion and innovation, leading to job creation and potentially higher wages to attract and retain employees. However, businesses may also need to adapt to a changing labor market, where workers have greater financial independence and might be more selective about job opportunities, pushing companies to improve working conditions and benefits to remain competitive.

Governments implementing UBI face the challenge and opportunity to reshape local and international policies in response to its effects on society. Social welfare, taxation, and employment policies may need to be revised to accommodate the new economic landscape created by UBI. These policies could include reevaluating social service programs and considering adjustments to tax structures to fund UBI sustainably. In addition, countries with UBI programs might set precedents for social welfare that influence global policy discussions, potentially leading to a rethinking of economic aid, development strategies, and international collaborations.

Implications of UBI and kids

Wider implications of UBI and kids may include: 

• Demographic shifts, with potential increases in birth rates as financial barriers to starting a family are reduced.


• Governments adopting UBI programs specifically for newborns to help establish financial stability early on.


• Biotech firms offering fertility treatments and procedures as more couples prioritize having children.


• Increased spending on products and services geared toward family life and children, as more people have increased disposable income.


• The education sector recovering from low enrollment rates and lack of funding.


• Countries reversing their aging population through better family services and social security programs.


• Governments revising tax systems to fund UBI, possibly leading to higher taxes on corporations and the wealthy.


• Challenges in funding UBI sustainably, possibly leading to cuts in other public services or the need for innovative funding solutions.

Questions to consider

• What changes could governments need to make in tax policies to sustainably fund a UBI program?


• How would having a UBI influence your decision to start a family?