by Kate McFarland | Jun 3, 2017 | Research
The Institute for Policy Research (IPR) at the University of Bath published its latest report on the effects of basic income — titled “Exploring the Distributional and Work Incentive Effects of Plausible Illustrative Basic Income Schemes” — on May 18, 2017.
Authored by IPR Research Associate Luke Martinelli, the report builds upon the working paper “The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK” (March 2017), in which Martinelli used simulation techniques to model four different types of basic income schemes (varying according to the amount of the benefit and accompanying changes in the tax and benefit system) and their effects on poverty and inequality.
The new report carries out a more detailed analysis of basic income schemes set at the three levels found to be most plausible in the earlier report: the level of the tax saving implied by the UK’s personal income tax allowance (which it would replace); the level of the UK’s existing social assistance benefits (many of which would be replaced); the level of existing benefits plus premiums for the disabled.
In this new contribution, Martinelli examines the predicted impact of these schemes on financial work incentives, including both financial incentives to work at all and incentives to increase work marginally. Martinelli looks in greater detail at the distributional consequences of the basic income schemes, including the effect on women and disabled individuals.
According to Martinelli, “Both of these elements are crucial to efforts to evaluate whether basic income has desirable effects and what types of design features would help make the policy politically feasible. The models we examine in this paper present a number of issues that basic income advocates will have to address as they think about implementation and policy design more closely.”
The report concludes that, with respect to distributional consequences, each scheme results in both winners and losers, stating, “Our core insight is that for the most part, even when particular groups gain (lose) on average, there are usually still non-trivial numbers of individuals and households who are worse off (better off).”
Concerning work incentives, each scheme sees a reduction in financial work incentives for most individuals. However, the distribution of effects was such that “we can imagine the effects of stronger work incentives on particularly sensitive groups to outweigh the more generalised effect of weaker work incentives over the wider population.”
Download the full report from IRP’s website:
“IPR Report: Exploring the Distributional and Work Incentive Effects of Plausible Illustrative Basic Income Schemes” (Institute for Policy Research, University of Bath).
Reviewed by Dawn Howard
Photo: “Rough sleeper” in Taunton, England; CC BY-NC-ND 2.0 Neil Moralee
by Kate McFarland | May 15, 2017 | Research
The European policy journal Intereconomics has published a forum on basic income (“Universal Basic Income: The Promise vs the Practicalities”) in its March/April 2017 volume, featuring five short articles on the topic.
The introduction to the forum asserts that “real-world implementation [of a UBI] is anything but basic. No serious answers have been found to the question of how to finance such a system, and until a workable solution is found, a UBI is simply not feasible.” Several of the articles in the forum reflect this skepticism concerning the possibility of sustainably financing a basic income — including “The Basics of Basic Income” (available in full online) by John Kay of St John’s College in Oxford, “Universal Basic Income Financing and Income Distribution – The Questions Left Unanswered by Proponents” by Heiner Flassbeck (Makroskop Mediengesellschaft mbH), and “Universal Basic Income – Empty Dreams of Paradise” by Hilmar Schneider (Institute of Labor Economics).
On the other hand, Thomas Straubhaar (University of Hamburg) endorses UBI in “On the Economics of a Universal Basic Income” — calling it “the best social-political prerequisite for ‘prosperity for all’ in the 21st century.” Finally, Olli Kangas, Miska Simanainen, and Pertti Honkanen, three members of Kela, the Social Insurance Institution of Finland, discuss potential pros and cons of a partial basic income in their nation in the article “Basic Income in the Finnish Context” — concluding that “there are many strong arguments being made both in favour of and opposed to basic income. Unfortunately, there are not enough facts yet. The Finnish experiment hopes to change that.”
Reviewed by Genevieve Shanahan
Photo CC BY-ND 2.0 Hans Splinter
by Cameron McLeod | Apr 15, 2017 | Research
Kimberly G. Noble, associate professor of neuroscience and education at Columbia University’s Teachers College, has published an article in Nature which summarizes her research background and an upcoming experiment into brain development and poverty. Noble asks whether poverty may affect the development, “the size, shape, and functioning,” of a child’s brain, and whether “a cash stipend to parents” would prevent this kind of damage. Noble here describes the background and methodological underpinnings of a larger experiment not yet begun; the development of which Basic Income News has covered in the past.
Noble writes that “poverty places the young child’s brain at much greater risk of not going through the paces of normal development.” Children raised in poverty perform less well in school, are less likely to graduate from high school, and are less likely to continue on to college. Children raised in poverty are also more likely to be underemployed when adults. Sociological research and research done in the area of neuroscience has shown that a childhood spent in poverty can result in “significant differences in the size, shape and functioning” of the brain. Can the damage done to children’s brains be negated by the intervention of a subsidy for brain health?
Noble summarizes her 15 years of research into this subject. This most recent study’s fundamental difference from past efforts is that it explores what kind of effect “directly supplementing” the incomes of families will have on brain development. “Cash transfers, as opposed to counseling, child care and other services, have the potential to empower families to make the financial decisions they deem best for themselves and their children.” Noble’s hypothesis is that a “cascade of positive effects” will follow from the cash transfers, and that if proved correct, this has implications for public policy and “the potential to…affect the lives of millions of disadvantaged families with young children.”
Paper: Kimberly G. Noble, “Brain Trust,” Scientific American 316, 44-49, March 2017
Photo Credit: Childhood CC Farhad Sadykov
by Kate McFarland | Apr 13, 2017 | Research
Global Social Policy, a peer-reviewed journal on public policy and social development, has included a forum on basic income in its March 2017 volume.
The forum contains four short articles:
1. “Universal basic income in a feminist perspective and gender analysis” by Patricia Schulz (published previously, and summarized in Basic Income News here).
2. “Universal basic income as development solution?” by Anita Lacey (Politics and International Relations, University of Auckland, New Zealand). Lacey outlines the potential for UBI to promote individual freedom and impact social and economic relations, and briefly describes the basic income pilot conducted in Namibia.
3. “Social protection and basic income in global policy” by Moritz von Gliszczynski (LAG Soziale Brennpunkte Niedersachsen, Germany). Von Gliszczynski analyzes the lack of attention to UBI in global policy discourse, and argues that this is due to two factors: first, in contrast to alternative policies such as social cash transfers, UBI is not directly aimed at traditional goals such as “transform[ing] the poor into agents of development”; second, proposals for UBI are vague and supported by comparative little empirical evidence.
4. “Basic income: A social democratic perspective” by Andrew Jackson (Carleton University and Broadbent Institute, Canada). Jackson argues UBI is too expensive and risks jeopardizing existing programs. Additionally, raising taxing to support a large, untargeted benefit is likely not to be politically feasible.
Reviewed by Cameron McLeod
Photo CC BY-NC-ND 2.0 The Shopping Sherpa
by Kate McFarland | Apr 11, 2017 | Research
Canada’s Citizens for Public Justice (CPJ), a faith-based nonprofit organization dedicated to researching and promoting justice in public policy, has published a briefing note on CPJ’s position on guaranteed livable income (GLI) (sometimes also referred to as a ‘guaranteed minimum income’ or ‘guaranteed annual income’). CPJ defines a GLI as an “income security system that would ensure that everyone has access to the basic necessities of life and the means to participate meaningfully in the life of their community” — which encompasses several types of policies, including a negative income tax (NIT), top-up programs, and a universal basic income (here called a ‘demogrant’ as is common in Canadian terminology*).
A long-time supporter of GLI, CPJ has published work on the topic in the past, including an infographic previously featured in Basic Income News (here and here) and a backgrounder report and position paper that were published as two-part feature “Toward a Guaranteed Livable Income” in June 2008. Additionally, CPJ has participated in events hosted by BIEN’s two North American affiliates–the Basic Income Canada Network and US Basic Income Guarantee Network–and, indeed, the organization was a cofounder of the Canadian affiliate at the 2008 BIEN Congress in Dublin, Ireland.
In the new paper, CPJ re-articulates its position that GLI is “an important strategy for addressing fundamental societal inequities” in Canada. More specifically, it recommends an incremental approach to implementing a nationwide GLI program, expanding successful programs for children and seniors to poor adults of working age. In this, CPJ calls for an NIT or top-up design–which would involve transfers only to the poor–over a basic income or demogrant, which judges to be “prohibitively expensive” even at amounts below the country’s most commonly used low-income levels. Moreover, CPJ recommends that, while benefits should be granted to individuals (as in a basic income), the program should be structured to account for household characteristics (such as numbers of children and caregivers) in determining the amount of the benefit.
CPJ advises the use of pilot studies to determine what specific design of the GLI is most effective at reducing poverty while guaranteeing that no low-income individuals are worse off than under the current system. In doing so, the organization stresses the importance of community involvement in the research.
The CPJ’s new briefing note comes at a time when GLI is in the spotlight in Canada–with Ontario planning to launch a pilot study in the spring of this year. In February 2016, the provincial government allocated part of its budget to a GLI pilot, and the project has been in development since this time. Following the release of a preliminary discussion paper by project adviser Hugh Segal (a former Canadian Senator and long-time GLI advocate), the government solicited public feedback on the design of the pilot. Results from the public consultations were published in March 2017.
Reference
Citizens for Public Justice (March 2017) “Briefing Note: Towards a Guaranteed Livable Income“
*In the Canadian context, the term ‘basic income’ or ‘basic income guarantee’ is frequently used to mean guaranteed livable income.
Reviewed by Dawn Howard
Photo CC BY-NC 2.0 Kat Northern Lights Man
by Genevieve Shanahan | Apr 9, 2017 | Research
Carlos Rodríguez-Castelán, a senior economist for Poverty and Equity Global Practice at the World Bank Group, has written a policy research working paper analysing conditional cash transfer programmes. Such conditional policies provide cash transfers to households only if they meet requirements – such as school attendance or health checkups – thought to be beneficial in terms of poverty alleviation. The intention is that poverty is addressed in two ways: through the cash payment in the short term, and through the “human capital formation” realised through the conditions in the longer term.
A worry, however, is that the poorest households are excluded from such programmes, as they are the least likely to be able to meet the conditions of the transfer:
“Because targeted transfers are usually conditioned on the consumption of normal goods, richer eligible households are more likely to consume more educational and health care opportunities than poorer ones. Thus, the eligible poorest households may benefit least from conditional cash transfers even to the extent that they may not participate at all.”
Of particular relevance to the question of basic income (defined as universal, individual, and unconditional) is the finding that, for governments that care about how poor the poorest are, rather than merely the proportion of residents who are classed as poor, “unconditional cash transfers may be preferable over conditional cash transfers”.
Carlos Rodríguez-Castelán, “Conditionality as Targeting? Participation and Distributional Effects of Conditional Cash Transfers,” World Bank Group, January 11, 2017.
Reviewed by Cameron McLeod
Photo: Receiving cash transfer payments, CC BY-NC-ND 2.0 World Bank Photo Collection
