by Daniele Fabbri | Jan 19, 2019 | Research
Picture Credit to: University of Bath
The Institute for Policy Research (IPR), based at the University of Bath, launched a research project on the economics of Basic Income (BI).
The project will “examine the economics of Basic Income, including the interaction between technology, output GDP, consumer income and expenditure.” The project has been set up with the collaboration of Geoff Crocker from Basic Income Forum.
The research will look at the fitness of BI as an element for the management of macroeconomic demand. Through the use of empirical economic data, the research will test the hypothesis that in highly technological economies the increase in productivity causes wages to fall (a phenomenon that together with falling employment rates is known as the great decoupling), requiring the introduction of a source of income disjoined from work: Basic Income.
The research project will also compare the effectiveness of BI in combating the unemployment and poverty traps with other forms of unearned income, and consider its effectiveness in avoiding economic crisis, that is, its stabilizing effect, in comparison with consumer credit and household debt.
The study will also investigate whether public sector deficit is an inescapable reality in high technology economies, and if there is potential for using debt free fiat money as a replacement for it and as a source of funding for BI, an idea already proposed by Crocker.
More information at:
University of Bath website: “The Economics of Basic Income”
André Coelho, “New Link: Basic Income Forum”, Basic Income News, July 12th, 2018
André Coelho, “VIDEO: The economics of basic income (by Geoff Crocker)”, Basic Income News, April 26th, 2018
by Kate McFarland | Sep 28, 2017 | News
The Institute for Policy Research at the University of Bath, which has published a series of reports on the feasibility and implementation of basic income, commissioned a recently published survey on attitudes towards basic income in the UK.
The survey was conducted by the British market research organization Ipsos MORI, who interviewed a sample 1,111 individuals from the UK population aged 18 to 75. Interviews were conducted online in August 2017. In the recently published results, the survey data are weighted to represent the general UK population according to age, gender, region, employment status, social grade, and educational attainment.
In a series of three multi-part questions, Ipsos MORI queried respondents about their views on universal basic income (UBI), which it defined, similarly to BIEN, as “a regular income paid in cash to every individual adult in the UK, regardless of their working status and income from other sources In other words, it would be: universal (i.e. paid to all), unconditional (i.e. paid without a requirement to work); and paid to individuals (rather than to a household).”
Interviewees were also instructed to assume, for the purposes of the survey, that the amount of the UBI “would be set roughly at the amount the UK government judged to be necessary to cover basic needs, e.g. food and clothing (but not housing costs).”
Before laying out the description of UBI, the survey questionnaire additional mentioned, “As you may be aware, some countries are considering introducing a basic income.”
Results
Asked whether they would support UBI described as above, 49% of respondents replied affirmatively (15% “strongly support” and 33% “tend to support”), while 26% replied negatively (17% “strongly oppose” and 9% “tend to oppose”).
Reported levels of support decreased substantially, however, when funding mechanisms were specified. Only 30% would support UBI if it entailed an increase in taxes, with 40% opposing UBI in this case. Meanwhile, 37% would support, and 30% would oppose, a UBI funded by cuts on spending on current welfare benefits. If both funding mechanisms were put into place, support for UBI decreases to 22%, while opposition increases to 47%.
The preceding result is similar to what was observed in a 2016 poll conducted by Canada’s Angus Reid Institute, which saw that respondents tended to favor basic income in principle, but would not support an increase in taxes to fund it in their country.
In the second question, respondents were asked “Regardless of whether you support or oppose the UK Government introducing a basic income, which of the following, if any, would be your most preferred way of mainly funding a basic income, if it was introduced?” Options included “increasing taxes on wealth” (34% favored), “cutting existing welfare benefits” (28% favored), “raising income tax” (12% favored), and “other” (3% favored).
The second part of this question broadens the definition of a “basic income scheme” from the initial definition, asking respondents if they would support such as program if certain compromises were made to universality and unconditionality. More than half of respondents replied that they would support a policy “only paid to those who are in work, in training, doing voluntary work, or pensioners” (52% strongly support or tend to support) or one “only paid to those on low incomes” (57% strongly support or tend to support), with only 18% and 17%, respectively, reporting opposition to the policies. (It should be noted, however, that it would conflict with most established uses of the term–including that of BIEN–to call such a policy a “basic income” scheme.)
Support decreased if the program were only to benefit young people (aged 18 to 24) “who are in work, full time education, or in training”: 35% would support (or tend to support) such a program, while 33% would oppose (or tend to oppose) it.
The third and final question queried interviewees on the “how convincing” they personally found each of six arguments that have been made in favor of basic income. The results tentatively suggest that, among British adults, arguments that emphasize the ability for UBI to support unpaid work tend to have more pull than those that emphasize the policy’s potential to encourage traditional paid work.
The argument judged most convincing was one that framed UBI as a way of recognizing the value of unpaid work: “Many people do very important work that is unpaid, such as caring or other voluntary work. A basic income would be a way of rewarding and encouraging others to do this type of work.” A full 79% of respondents found the argument “very” or “fairly” convincing, while only 15% judged it “not very” or “not at all” convincing.
All arguments provided were found to be more convincing that not (i.e. considered by a majority of survey respondents to be “very” or “fairly” convincing). However, the least persuasive was found be the following: “Many unemployed people do not have an incentive to find a job because benefits they may currently be receiving are withdrawn. As everyone would receive it, a basic income would encourage unemployed people to get a job by allowing them to keep that basic income if they find work.” A relatively small 57% deemed this argument “very” or “fairly” convincing, and 35% found it unconvincing (or “not very” convincing).
Other arguments focused on automation, job insecurity, bureaucracy in administering welfare, the “harsh and unfair” nature of conditional welfare programs.
More information about the survey, including all weighted and unweighted data, is available here:
Ipsos MORI, “Half of UK adults would support universal basic income in principle,” 8 September 2017.
Reviewed by Russell Ingram
Photo (Newquay, Cornwall, United Kingdom) CC BY 2.0 Giuseppe Milo
by Kate McFarland | Sep 27, 2017 | Research
The Institute for Policy Research (IPR) at the University of Bath has released a policy brief titled “Assessing the Case for a Universal Basic Income in the UK”.
The 94-page policy brief surveys the rise in popularity of the idea of universal basic income (UBI), especially in the UK context, and examines its feasibility and possible implementation strategies.
The report’s author, IRP Research Associate Luke Martinelli, draws upon his previous microsimulation studies, including “The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK” (March 2017) and “Exploring the Distributional and Work Incentive Effects of Plausible Illustrative Basic Income Schemes” (May 2017). He supplements his own work with the simulation analyses of other researchers, including Malcolm Torry (Citizen’s Income Trust) and Howard Reed and Stewart Lansley (Compass) in the UK and Olli Kangas (Kela) in Finland. Martinelli argues that microsimulation techniques, which can be used to model the economic effects of UBI at a national level, allow researchers to address questions about the feasibility and desirability of UBI that are out-of-reach by “real-world” experiment–given that the latter “do not test for the crucial effects of accompanying tax changes, nor examine how changes in income and behavioural responses would be distributed across different demographic groups in the case of a truly universal payment” (p 16).
In Chapter 3 of the policy brief, Martinelli applies these simulation studies to the question of the affordability of UBI. Investigating both full and partial UBI schemes, Martinelli investigates the fiscal implications of the policy for the UK government, taking into account potential adjustments to the existing tax and benefit system, as well as their consequences for poverty and inequality. Overall, Martinelli finds that data “appear to suggest” that “it is possible to design a UBI such that it is both affordable and adequate” (emphasis in original), with the most feasible option being a partial UBI on top of existing means-tested benefits (p 48). However, he issues several notes of caution in interpreting this (apparent) consequence.
One cautionary note concerns the fact that the simulation studies use only static models, which do not provide for possible changes in labor market participation resulting from the introduction of UBI. In Chapter 4, however, Martinelli examines the labor market effects of UBI in detail, again drawing upon simulation studies. Here, he considers the results of studies that model the impact of UBI schemes on financial work incentives, concluding that UBI does significantly improve incentives, especially for low-income groups and recipients of means-tested benefits (although, as the author admits, monetary incentives are “by no means the only factor affecting labour supply decisions,” p 63). In this chapter, Martinelli supplements the simulation analysis with empirical findings from previous experiments on unconditional cash benefits (including, especially, from the negative income tax experiments conducted in Manitoba in the late 1970s). He also reviews a range of theoretical considerations, including the prima facie tension between the positions of UBI supporters who see the policy as a way of incentivizing employment (e.g. as contrasted to means-tested benefit schemes) and those who advocate the policy as providing an “exit option” from employment.
In the final chapter of the policy brief, Martinelli scrutinizes implementational challenges facing UBI in the UK, including complications building political coalitions around the idea. As Martinelli stresses, apparent political consensus around UBI is likely to dissolve when specific policy implementations are issue. In concluding the report, he urges supporters of UBI not to demand a full basic income immediately, but instead to consider an incremental approach. As potential first steps, Martinelli mentioned a small universal payment (“partial basic income”) or a basic income restricted to certain age groups (e.g., as suggested by Malcolm Torry, young adults or adults nearing pension age).
The full report can be downloaded here:
Luke Martinelli, “Assessing the Case for a Universal Basic Income in the UK”, Institute for Policy Research, September 2017.
Reviewed by Russell Ingram
Photo (Bath, England) CC BY-NC-ND 2.0 David McKelvey
