Exploring the Distributional & Work Incentive Effects of Plausible Illustrative Basic Income Schemes
An IPR Report examining how a basic income might affect different groups disproportionately, and whether it would encourage people not to work.
Among the many concerns about universal basic income (UBI or basic income), two of the most commonly expressed are that it would have undesirable distributional consequences (by failing adequately to compensate the recipients of withdrawn benefits) and that it would erode work incentives (via higher tax levels). This paper addresses these concerns, building on our previous working paper The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK in two main ways:
- By exploring the distributional consequences in greater depth
- By exploring outcomes of UBI schemes in relation to static financial work incentives
We examine three schemes, argued to be the most plausible of those modelled in the previous working paper, and pitched at three levels of generosity.