Basic income as a policy option: technical background note illustrating costs and distributional implications for selected countries

Publication type:

Report

Author

- -

Publication date

15 May 2017

Summary

The concept of a Basic Income (BI), an unconditional transfer paid to each individual is not new. However, although many OECD countries have non-contributory, non-means tested benefits for certain groups (most commonly children or pensioners) no country has made a BI the central pillar of its social security system. The recent upsurge in attention to BI proposals in OECD countries, including in those with long-standing traditions of providing comprehensive social protection, is therefore remarkable. Ongoing debates on the subject of a Basic Income in different OECD countries and the potential advantages and disadvantages of replacing existing social protection systems for working-age households with a Basic Income are summarised in an OECD policy brief entitled “Basic Income as a policy option: Can it add up?” (available via www.oecd.org/employment/future-of-work.htm). The policy brief also shows some headline results from a simulation of the introduction of a particular variant of a Basic Income in four European countries with differing existing social security systems: Finland, France, Italy and the United Kingdom. This technical note gives a more detailed description of this simulation analysis, and shows more comprehensive results of these simulations. It also presents some additional results, including information on the impact of a hypothetical BI reform on the incomes of particular family types and the direct effects of the reform on financial work incentives.

Subjects

Households, Poverty, Public Policy, Welfare Benefits, Microsimulation, Taxation and International Economic Relations

Links

http://www.oecd.org/els/soc/Basic-Income-Policy-Option-2017-Brackground-Technical-Note.pdf