Basic income as a policy option: technical background note illustrating costs and distributional implications for selected countries
15 May 2017
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.