[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp15952.html
   My bibliography  Save this paper

Not That Basic: How Level, Design and Context Matter for the Redistributive Outcomes of Universal Basic Income

Author

Listed:
  • Aerts, Elise

    (University of Antwerp)

  • Marx, Ive

    (University of Antwerp)

  • Verbist, Gerlinde

    (University of Antwerp)

Abstract
Proponents of a basic income (BI) claim that it could bring significant reductions in financial poverty, on top of many other benefits, including greatly reduced administrative complexity and cost. Using microsimulation analysis in a comparative two-country setting, we show that the potential poverty-reducing impact of BI strongly depends on exactly how and where it is implemented. Implementing a BI requires far more choices than advocates seem to realize. The level at which the BI is set matters, but its exact specification matters even more. Which parts of the existing tax-benefit system are maintained, and which parts are abolished, modified or replaced? The impact of a BI, be it a low or a high one, thus strongly depends on the characteristics of the system that it is (partially) replacing or complementing, as well as the socio-economic context in which it is introduced. Some versions of BI could potentially help to reduce poverty but always at a significant cost and with substantial sections of the population incurring significant losses, which matters for political feasibility. A partial basic income complementing existing provisions appears to make more potential sense than a full basic income replacing them. The simplicity of BI, however, tends to be vastly overstated.

Suggested Citation

  • Aerts, Elise & Marx, Ive & Verbist, Gerlinde, 2023. "Not That Basic: How Level, Design and Context Matter for the Redistributive Outcomes of Universal Basic Income," IZA Discussion Papers 15952, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15952
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp15952.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James Browne & Herwig Immervoll, 2017. "Mechanics of replacing benefit systems with a basic income: comparative results from a microsimulation approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(4), pages 325-344, December.
    2. Badenes-Plá, Nuria & Gambau-Suelves, Borja & Navas Román, María, 2019. "Distributional and welfare effects of replacing monetary benefits with Universal Basic Income in Spain," EUROMOD Working Papers EM8/19, EUROMOD at the Institute for Social and Economic Research.
    3. John Quiggin & Troy Henderson, 2023. "Trade Unions and Basic Income," Exploring the Basic Income Guarantee, in: Malcolm Torry (ed.), The Palgrave International Handbook of Basic Income, edition 2, chapter 0, pages 565-580, Palgrave Macmillan.
    4. Marx, Axel & Peeters, Hans, 2008. "An unconditional basic income and labor supply: Results from a pilot study of lottery winners," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(4), pages 1636-1659, August.
    5. Tine Hufkens & Tim Goedemé & Katrin Gasior & Chrysa Leventi & Kostas Manios & Olga Rastrigina & Pasquale Recchia & Holly Sutherland & Natascha Van Mechelen & Gerlinde Verbist, 2019. "The Hypothetical Household Tool (HHoT) in EUROMOD: a new instrument for comparative research on tax-benefit policies in Europe," International Journal of Microsimulation, International Microsimulation Association, vol. 12(3), pages 68-85.
    6. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    7. Luca Michele Cigna, 2022. "Looking for a North Star? Ideological justifications and trade unions’ preferences for a universal basic income," European Journal of Industrial Relations, , vol. 28(2), pages 129-146, June.
    8. Magnani, Riccardo & Piccoli, Luca, 2020. "Universal basic income with flat tax reform in France," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 235-249.
    9. Matteo Picchio & Sigrid Suetens & Jan C. van Ours, 2018. "Labour Supply Effects of Winning a Lottery," Economic Journal, Royal Economic Society, vol. 128(611), pages 1700-1729, June.
    10. Holly Sutherland & Francesco Figari, 2013. "EUROMOD: the European Union tax-benefit microsimulation model," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 4-26.
    11. Pierson, Paul, 2000. "Increasing Returns, Path Dependence, and the Study of Politics," American Political Science Review, Cambridge University Press, vol. 94(2), pages 251-267, June.
    12. Silvia Avram & Eva Militaru, 2016. "Interactions Between Policy Effects, Population Characteristics and the Tax-Benefit System: An Illustration Using Child Poverty and Child Related Policies in Romania and the Czech Republic," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(3), pages 1365-1385, September.
    13. Vanderborght Yannick, 2006. "Why Trade Unions Oppose Basic Income," Basic Income Studies, De Gruyter, vol. 1(1), pages 1-20, June.
    14. Manuela A. de Paz-Báñez & María José Asensio-Coto & Celia Sánchez-López & María-Teresa Aceytuno, 2020. "Is There Empirical Evidence on How the Implementation of a Universal Basic Income (UBI) Affects Labour Supply? A Systematic Review," Sustainability, MDPI, vol. 12(22), pages 1-36, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ive Marx;, 2024. "Basic Income advocates, sober up," Working Papers 2401, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Marx, Ive, 2024. "Basic Income Advocates, Sober Up," IZA Discussion Papers 16757, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elise Aerts; & Ive Marx; & Gerlinde Verbist;, 2023. "Not That Basic: How Level, Design and Context Matter for the Redistributive Outcomes of Universal Basic Income," Working Papers 2303, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Verena Löffler, 2021. "Questioning the feasibility and justice of basic income accounting for migration," Politics, Philosophy & Economics, , vol. 20(3), pages 273-314, August.
    3. Hugo Priemus & Bert van Wee (ed.), 2013. "International Handbook on Mega-Projects," Books, Edward Elgar Publishing, number 14791.
    4. Manuela A. de Paz-Báñez & María José Asensio-Coto & Celia Sánchez-López & María-Teresa Aceytuno, 2020. "Is There Empirical Evidence on How the Implementation of a Universal Basic Income (UBI) Affects Labour Supply? A Systematic Review," Sustainability, MDPI, vol. 12(22), pages 1-36, November.
    5. Martinelli, Luke & O'Neill, Kathryn, 2019. "A comparison of the fiscal and distributional effects of alternative basic income implementation modes across the EU28," EUROMOD Working Papers EM14/19, EUROMOD at the Institute for Social and Economic Research.
    6. Luca Michele Cigna, 2022. "Looking for a North Star? Ideological justifications and trade unions’ preferences for a universal basic income," European Journal of Industrial Relations, , vol. 28(2), pages 129-146, June.
    7. Penne, Tess & Goedemé, Tim, 2021. "Can low-income households afford a healthy diet? Insufficient income as a driver of food insecurity in Europe," Food Policy, Elsevier, vol. 99(C).
    8. Franziska Appel & Alfons Balmann, 2023. "Predator or prey? Effects of farm growth on neighbouring farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 214-236, February.
    9. Zachary Parolin & Linus Siöland, 2019. "Support for a Universal Basic Income: A Demand-Capacity Paradox?," Working Papers 1901, Herman Deleeck Centre for Social Policy, University of Antwerp.
    10. Richiardi, Matteo, 2022. "A basic income for France: ideas for a debate," Centre for Microsimulation and Policy Analysis Working Paper Series CEMPA6/22, Centre for Microsimulation and Policy Analysis at the Institute for Social and Economic Research.
    11. EEA Wolf & Wouter Van Dooren, 2018. "‘Time to move on’ or ‘taking more time’? How disregarding multiple perspectives on time can increase policy-making conflict," Environment and Planning C, , vol. 36(2), pages 340-356, March.
    12. Mark Axelrod, 2017. "Blocking change: facing the drag of status quo fisheries institutions," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(4), pages 573-588, August.
    13. René Böheim & Thomas Horvath & Thomas Leoni & Martin Spielauer, 2023. "The Impact of Health and Education on Labor Force Participation in Aging Societies: Projections for the United States and Germany from Dynamic Microsimulations," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(3), pages 1-35, June.
    14. Herwig Immervoll & Cathal O’Donoghue & Jules Linden & Denisa Sologon, 2023. "Who pays for higher carbon prices?: Illustration for Lithuania and a research agenda," OECD Social, Employment and Migration Working Papers 283, OECD Publishing.
    15. Jörg Freiling, 2015. "Getting off the Track to Found – The Influence of Path Dependence on the Entrepreneurial Process (Zbaczajac z drogi ku zalozeniu przedsiebiorstwa – wplyw zaleznosci od szlaku na proces przedsiebiorczy," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(56), pages 13-37.
    16. Michael Christl & Silvia Poli, 2021. "Trapped in inactivity? Social assistance and labour supply in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(3), pages 661-696, August.
    17. Chantal C. Cantarelli & Bent Flyvbjerg, 2013. "Mega-projects’ cost performance and lock-in: problems and solutions," Chapters, in: Hugo Priemus & Bert van Wee (ed.), International Handbook on Mega-Projects, chapter 15, pages 333-355, Edward Elgar Publishing.
    18. Vincent Vergnat, 2021. "Tax-benefit policies to fight poverty among young adults in Europe," LISER Working Paper Series 2021-09, Luxembourg Institute of Socio-Economic Research (LISER).
    19. Leventi, Chrysa & Pezer, Martina & Bezeredi, Slavko, 2018. "Research note: The distributional impact of local social benefits in Croatia," EUROMOD Working Papers EM17/18, EUROMOD at the Institute for Social and Economic Research.
    20. Ágota Scharle & Balázs Váradi, 2013. "Identifying Barriers to Institutional Change in Disability Services. WWWforEurope Working Paper No. 41," WIFO Studies, WIFO, number 47016.

    More about this item

    Keywords

    basic income; poverty; income distribution; policy interaction; microsimulation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp15952. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.