Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/176996
Authors: 
Browne, James
Immervoll, Herwig
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 11192
Abstract: 
Recent debates of basic income (BI) proposals shine a useful spotlight on the challenges that traditional forms of income support are increasingly facing, and highlight gaps in social provisions that largely depend on income or employment status. A universal "no questions asked" public transfer would be simple and have the advantage that no-one would be left without support. But an unconditional payment to everyone at meaningful but fiscally realistic levels would likely require tax rises as well as reductions in existing benefits. We develop a comprehensive BI scenario that facilitates an assessment of the resulting fiscal and distributional effects in a comparative context, undertake a microsimulation study to quantify them, and propose a simple decomposition to identify the mechanisms that drive effects in different country contexts. Results illustrate the challenges, but also the strengths, of existing social protection systems. A BI would fix benefit coverage gaps that exist in many countries, but would require very substantial tax rises if it were to be set at a meaningful level. As support would not be targeted on those most in need, it would not be a cost-effective way of directly reducing income poverty.
Subjects: 
basic income
targeting
individualisation
conditionality
microsimulation
JEL: 
C81
D31
H22
H55
Document Type: 
Working Paper
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