by Kate McFarland | Apr 25, 2017 | News
Luke Martinelli is a research associate for the universal basic income project of the Institute for Policy Research (IPR) at the University of Bath. In March 2017, Martinelli published the working paper “The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK”, which uses simulation techniques to examine the effects of four revenue-neutral basic income schemes for the UK on poverty and inequality.
Accompanying the release of this 46-page working paper, Martinelli also published a shorter blog post, focusing on some of the methodological issues underlying his decision to conduct simulation studies.
As Martinelli describes in the post, empirical evidence concerning the effects of basic income can be sorted into two main types: ex-post (“after the fact”) and ex-ante (“before the event”).
Ex-post evidence includes the results of pilot studies and experiments specifically designed to test some of the effects of introducing a basic income, as well as observational studies of related policies such as Alaska’s Permanent Fund Dividend. Martinelli points out that experimental studies are limited in their ability to forecast the effects of a basic income. For example, trials are limited in duration (whereas a basic income would be lifelong) and are influenced heavily by the specific contexts in which they are implemented, constraining the applicability of their results to other contexts. Moreover, the policies analyzed in both experimental and observational studies often diverge from full-blown basic income schemes in key respects.
Ex-ante evidence, in contrast, is exemplified by microsimulation–the technique used in Martinelli’s working paper–which uses computing methods to simulate any of a number of tax and benefit reforms. While microsimulation predict the fiscal and distributional consequences of a broad array of possible policies, it has other limitations; for instance, it does not shed light on the behavior effects of basic income (or other policies) or take account of such effects in prediction. Thus, Martinelli believes that ex-ante evidence must complement, rather than replace, ex-post evidence.
Martinelli’s forthcoming paper “Exploring the Distributional and Work Incentive Effects of Plausible UBI Schemes” will further examine the “distribution of winners and losers” under UBI, again using microsimulation techniques.
Read the full post:
Luke Martinelli, “Addressing the evidence deficit: how experimentation and microsimulation can inform the basic income debate,” IPR blog, March 13, 2017.
Reviewed by Cameron McLeod
Photo CC BY 2.0 Michael Greenberg
by Kate McFarland | Mar 31, 2017 | Research
Luke Martinelli, Research Associate at the University of Bath’s Institute for Policy Research (IPR), has prepared a new working paper that uses simulation techniques to analyze the effects of four different revenue-neutral basic income schemes. Martinelli’s analysis suggests that the design of a basic income falls prey to the “iron triangle of welfare reform” — wherein it is impossible simultaneously to meet the goals of keeping the program at a reasonable cost, meeting the needs of beneficiaries, and maintaining work incentives (see pp. 6, 44-46).
The paper was published as part of the IPR’s ongoing project Examining the Case for a Basic Income, which also includes a series of lectures, workshops, and other events.
Abstract:
In line with a dramatic resurgence of interest in basic income in recent years, there have been a number of studies analysing the fiscal and distributional consequences of specific basic income schemes. These ‘microsimulation’ studies use representative household surveys to examine the effects of hypothetical reforms at the national level and for specific demographics.
We make several original contributions to this burgeoning literature, modelling a number of original basic income schemes. These include a wide variety of schemes with full coverage and a number of schemes with partial coverage. We also carry out a detailed analysis of four revenue-neutral full schemes.
- Among systems with ‘full’ coverage, we have modelled four levels of generosity, and four types of compensatory tax and benefit reform for each.
- For the partial coverage schemes, we model how expansion of coverage could be sequenced in order to distribute the fiscal burden over a longer period of time.
- The revenue-neutral schemes assume that increases in expenditure must be broadly matched by increases in tax revenue. We suggest that besides the elimination of the personal income tax allowance and national insurance lower and upper thresholds, the income tax rate would have to increase by 4% (for a basic income set at the standard level of existing benefits) and 8% (for one with premiums for individuals determined as disabled) to pay for our schemes.
For each scheme, we discuss the fiscal implications and the implications for levels of poverty and inequality. For the revenue neutral schemes, we provide a more detailed breakdown of distributional effects, disaggregating changes in household income levels by income quintile, family type, number of children, and labour market status. The main argument of the paper is that we are faced with a series of trade-offs with respect to policy design, between the goals of meeting need / alleviating poverty, controlling cost, and eliminating means-testing. Our schemes aims to replace a large range of existing benefits with a basic income. The unavoidable reality is that such schemes either have unacceptable distributional consequences or they simply cost too much. The alternative – to retain the existing structure of means-tested benefits – ensures a more favourable compromise between the goals of meeting need and controlling cost, but does so at the cost of administrative complexity and adverse work incentive effects.
Paper
Luke Martinelli, “The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK,” Institute for Policy Research, March 2017.
Photo: “lots of iron triangles” CC BY-NC-ND 2.0 danna § curious tangles
by Kate McFarland | Mar 13, 2017 | News
It has been said that “Basic Income is not left or right but forward.” The policy is alleged to transcend the partisan divide, drawing support from progressives as well as conservatives and libertarians. However, Joe Chrisp, a PhD Candidate in the University of Bath’s Institute for Policy Research (IRP), argues that the reality is more complicated. (Chrisp’s dissertation, supervised by Professors Nick Pearce and Jane Millar, concerns the feasibility of universal basic income.)
First, some of the apparent agreement stems from the fact that some individuals and political parties use the term ‘basic income’ in a different or more expansive way than BIEN’s definition. Although they call them by the same term, the policies they support are actually distinct.
Second, even if individuals across the political spectrum mean the same thing by ‘basic income’, they sometimes have divergent and deeply entrenched views on acceptable funding mechanisms.
Finally, Chrisp points out that some argue that, in general, “right versus left” is no longer the best dimension by which to characterize political divisions. Instead, a “universalist versus particularist“ dimension might be more apt. In this case, even if basic income does draw support from both left and right, this does not entail that it transcends the most important political divisions in today’s society.
Read the full article:
Joe Chrisp, “Basic income: beyond left and right?” IRP Blog; posted by James Harle on January 23, 2017.
Reviewed by Dave Clegg
Photo CC BY-NC-ND Angel Ortega
by Andre Coelho | Feb 3, 2017 | News
Photo: Nick Pearce. Credit to: Bristol Festival of Ideas.
In this audio recording of a conversation, in front of a live audience at the Bristol Festival of Ideas on the 17th of November, 2016, Louise Haagh, Anthony Painter, Nick Pearce and Torsten Bell discuss the pros and cons of the basic income idea, chaired by Jonathan Derbyshire.
In this talk, Anthony Painter, the Director of the Action Research Center at the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce), starts by describing what he calls the “gig economy” (one economy driven by tasks, not by jobs). He also refers to the great changes in the distribution of work which are occurring right now, and in the relationships with intelligent machines. According to him, people are feeling increasingly uncertain and powerless, which generates stress. That is his first argument for basic income: it is an agent for freedom. He says politics for basic income must be based in solidarity, empathy and compassion, and that basic income should not be pursued as an end in itself, but as a test and a measure for the betterment of society.
Nick Pierce, professor of Public Policy at the University of Bath (and former Director of the Institute for Public Policy Research), goes on to say that he considers himself to be a “friendly skeptic” of basic income. He recognizes qualities in the basic income movement, led by many activists, who defend tackling problems with current welfare states and pursue a vision/trend for the betterment of society; not simply reacting to problems. On the other hand, he does not agree that basic income can liberate individuals (from entanglement with the State and with the market), nor that it can liberate individuals from work. According to Pierce, work is a way to gain personal fulfillment and, as such, looks at basic income proponents as “anti-work” in a sense. He also fears basic income might lead people to disengage from one another, hence he considers it a dangerous form of dependency, particularly towards the State (seen as a provider). Pierce also points out that basic income, as a policy, will be a result of the social forces that have forged the different welfare states, hence may differ considerably from region to region. He advises basic income advocates to consider all of these regional differences, in order to propose meaningful basic income strategies.
Louise Haagh
Louise Haagh, as Reader at the Department of Politics in the University of York and co-Chair of the Basic Income Earth Network (BIEN), replies that basic income is a “natural outgrowth of social democracy”. This comes despite Haagh’s agreement that, in fact, the basic income movement has failed to detail the implementation realities of basic income around the world. However, she feels it has succeeded in getting basic income out of academia and into mainstream discourse. She also points out that other welfare features, such as public education and health, do not contain as many conditions as income support (e.g. behavioral conditions), but agrees that basic income should not be seen as a replacement for organized fulltime employment. Rather, they should be seen as a complementary feature to guarantee full citizenship. She also sees basic income as a small but crucial strategic element that enables societies to think about their development with a more long-term approach.
On the critical side against basic income, Torsten Bell, Director of the Resolution Foundation, says that basic income interest has appeared due to two anxieties: robot anxiety (human jobs are being “eaten” by machines) and Left Existential anxiety (real wages stagnate or dropped, plus support for the traditional Left is fading). However, he perceives this interest as waning progressively. Bell is convinced basic income is not going to happen in the UK, reasoning that robots are systematically underperforming compared to their human counterparts, and that there have never been more jobs in the UK. Moreover, he says, statistics show that part-time jobs are not rising, or have not been, since records have existed. Bell detaches the United States case from the European reality, stating that what is happening in the former is not likely to happen in the latter, and equates basic income to higher taxes and higher poverty. He further reasons that it makes no sense to give a basic income to rich people, and that generally the public does not like the idea that “you should be paid not to work”. Finally, he disagrees with a political organization system where an elite at the top own the robots and make all the money, which is then redistributed to everyone else (assumed idle).
Replying to criticisms, Anthony Painter underlines that the world of work is getting more precarious, less paid and more insecure; hence something – like basic income – must be done about it. Contrary to Torsten’s assertion, he highlights that basic income advocates usually justify basic income as a way to validate work, giving people the opportunity to contribute to society in a meaningful way. He also points out that any basic income implementation cannot possibly surpass the already tremendously bureaucratic welfare state in the UK, so it is only bound to reduce it. On the other hand, Nick Pierce disagrees that basic income is waning, but agrees that politicians are constantly searching for “big ideas” to hold on to. Finally, Louise Haagh agrees that fortunately the basic income idea is not defended on a pure philosophical ground anymore, but instead has progressed to a more hands-on, practical approach. As Nick, she also disagrees that the notion of a basic income is waning, judging from the daily activity at BIEN.
Listen to the full conversation:
Bristol Festival of Ideas, “Basic Income – An idea whose time has come?”, in association with the Institute for Policy Research and the University of Bath, November 17th 2016
by Kate McFarland | Dec 5, 2016 | News
Malcolm Torry, Director of the Citizen’s Income Trust and co-secretary of BIEN, delivered a public lecture titled “Money for everyone: The state of the Basic Income/Citizen’s Income debate” for the Institute for Policy Research (IPR) at the University of Bath on October 11, 2016. In it, he describes proposals for funding and administering a basic income.
A summary of Malcolm’s lecture has been posted on the Institute for Policy Research website, and the entire lecture is also available in both video and audio formats.
The lecture was held as part of IPR’s ongoing project Examining the Case for a Basic Income, which is studying the design and implementation of a basic income proposals in UK. The project description states:
A key aspect of the project is to ask whether and in what circumstances the UK public would support a UBI. To this end, the project is organising a number of public engagement activities to explore the wider issues and public concerns that implementing a UBI here might raise.
Torry’s lecture was the first in this series of public engagement activities.
On November 17, IPR sponsored a panel discussion and debate of basic income (Basic Income – An Idea Whose Time Has Come?), which was held as part of the Bristol Festival of Ideas.
Image: CC BY-SA 2.0 dotpolka
