Basic Income Experimentation Yesterday and Today: Challenges, Achievements, and Lessons
Wayne Simpson (University of Manitoba)
Policy discussion around a basic income is often based on a limited understanding of a vast literature on income maintenance issues that has been compiled over the past half century. In particular, significant social experimentation has tried to understand how a basic income program might be effectively designed and delivered and what its impact might be on the twin objectives of equity and efficiency. Those who wish to promote the concept of a basic income would be well advised to understand what research has been done on income maintenance and how it relates to modern circumstances. And those contemplating basic income pilot projects can learn a great deal from the challenges and accomplishments of fairly ambitious social experimentation conducted in the past. This paper provides an overview of the experiments to assess what we have learned from them, what questions remain unanswered, and what new issues arise in a modern, technologically advanced economy and labour market.
Basic Income in Canada: Principles and Design Features
Lindsay M. Tedds, Daria Crisan, & Gillian Petit (University of Calgary)
Basic income is not a single, uniform policy, but rather a range of policy proposals that share certain principles while also differing along key dimensions. Based on the extensive literature related to basic income, we conceptualize basic income as a class of policy proposals, all of which share common principles. In this paper, we look at the following questions: what are these generally shared principles and what are the differing dimensions? We highlight that designing any form of a basic income requires making well-thought-out choices with regard to how design elements will achieve specific objectives, and implementing a basic income requires working through a significant number of details.
Basic Income Simulations for the Province of British Columbia
David Green (University of British Columbia), Jonathan Rhys Kesselman (Simon Fraser University), Lindsay M. Tedds, Daria Crisan, & Gillian Petit (University of Calgary)
An important component of the work to be completed by the British Columbia’s Expert Panel on Basic Income is to design simulations to look at how various basic income (BI) models could work in B.C. (B.C. Poverty Reduction, 2018). The intent of these simulations is to identify the potential impacts and financial implications for B.C. residents of different variants of a BI. Given the poverty reduction targets passed by the B.C. government, detailed in Petit and Tedds (2020d), the potential impacts include those on the incidence and the depths of poverty in the province (B.C. Poverty Reduction, n.d.). The panel ran over 16,000 different BI scenarios to consider in B.C., which were modelled using Statistics Canada’s Social Policy Simulation Database and Model (SPSD/M) program. We evaluate different BI scenarios in terms of their implications for a variety of measures, including cost, number of recipients, rates of poverty, depths of poverty, distributional affects, and inequality impacts. This paper provides details regarding these simulations. Our goal in this paper is simply to consider different versions of a basic income in terms of both their cost implications and their implications for poverty reduction. We believe that identifying the most effective variants of a basic income in terms of these two criteria will help sharpen the conversation about the applicability of a basic income as a policy option for B.C. For the simulations full data set, click here.
Basic income has been promoted as an important policy tool for a long list of reasons, ranging from supporting increased entrepreneurial activity to increasing mental health. In this paper, I assess some of the key claims made about the impacts of a basic income: that it is simple to implement by using the tax system; that it reduces the welfare wall, increasing labour supply among IA recipients; that it would increase volunteering and caregiving; that it would improve child well-being, education and development; that it would lead to an increase in entrepreneurship; that it would reduce crime rates; that it would improve health outcomes and reduce health care system costs; and that it would lead to higher wages and better working conditions for low wage workers. I also consider some claims about negative effects, raised by basic income opponents, such as the claim that it would lead to an overall decrease in labour supply in the paid labour market. The assessment is based on the research papers commissioned for British Columbia’s Expert Panel on Basic Income. Overall, some of the claims for positive effects from a basic income receive support from the empirical evidence while others do not but even where there are positive outcomes a basic income is often not the most direct way to achieve the outcome and it is often difficult to determine whether a basic income would be better than income received through other, conditional programs.
Design Choice for Income-Transfer Programs: Structural, Economic, and Operational Aspects
Jonathan Rhys Kesselman (Simon Fraser University)
Income-transfer programs are a key element of social policy to ensure that individuals have a base assured level of income. Their eligibility criteria and how their benefits are structured are critical to their targeting, efficacy, incentives, and cost. This study provides a comprehensive description of the two main genres of transfer programs—income maintenance and earnings supplementation—and their subtypes and reviews the associated structural, economic, and operational aspects for each. Major design choices for each program type are reviewed for their economic and incentive effects, and related empirical literature is reviewed. Trade-offs among the program parameters associated with benefit adequacy, incentive effects, and program cost are assessed, as are the trade-offs among benefit responsiveness, incentive effects, and operational burdens associated with different benefit accounting methods. The study then applies its findings and insights to a broad assessment of implications for income-transfer policy choices in British Columbia.
Designing a Basic Income: Lessons from the Optimal Tax Literature
Robin Boadway (Queen's University), Katherine Cuff (McMaster University)
The literature on optimal income taxation is vast, and it has grown rapidly in recent years. Our purpose here is to provide a broad overview of the literature and its implications for basic income. We show that the optimal income tax literature prescribes a basic income guarantee as an implicit component of the optimal tax structure. However, little attention is paid to practical tax design and institutional considerations. We briefly discuss such practical matters, including administrative body and structure, benefit reduction rates, federalism, financing, and work incentives.
Evaluating the Existing Basic Income Simulation Literature
Lindsay M. Tedds & Daria Crisan (University of Calgary)
This paper delves into the academic literature that exists that models, in detail, specific basic incomes for Canada to understand what main proposals already exist in the literature. This information will help inform the work of B.C.’s Expert Panel on Basic Income in two ways. First, it will inform the panel as to what program designs and choice elements should be considered specifically for B.C. Second, it will highlight for the panel the basic income implementation challenges raised by the choices among basic income design elements that are not addressed by the existing literature, and these would need to be solved in designing and implementing a basic income. In many cases, addressing these challenges may require any basic income policy proposal to be redesigned along the way. This paper does not provide a technical critique of this literature, which is taken up by other work.
In-Kind Versus Cash Benefits in Social Programs: Choices, Structures, and Delivery
Jonathan Rhys Kesselman (Simon Fraser University), Michael Mendelson (Maytree Foundation)
In designing social programs, benefits can often be either in the form of unrestricted cash transfers or in-kind goods and services; and if in kind, the benefits can be structured and delivered in various ways. This paper assesses how these program design choices relate to policy objectives, characteristics of the good or service, individual autonomy, human rights and dignity, and social externalities. Also relevant are the characteristics and preferences of both beneficiaries and funders of programs. For many types of policy objectives and sets of values, unrestricted cash transfers cannot substitute for benefits provided in kind. The paper evaluates the issues in relation to specific types of “target” items for in-kind benefits and analyzes the use of alternative benefit structures. Relative advantages of alternative delivery modes—on the demand or supply side and through tax incentives, subsidies, vouchers, public agencies, or NGOs—are assessed. The preceding material presents a basis for comparing basic income versus basic services and for analysis and reform proposals relating to specific provisions in British Columbia’s income and social support system. The paper’s analysis and discussion will also have relevance for policies in other jurisdictions.
Policy Design, Cost Information and Support for Guaranteed Income
Richard Johnston, Sarah Lachance, Alan Jacobs (University of British Columbia)
This report presents the results of two studies on support for guaranteed income using survey experiments conducted on British Columbia voters. In the ﬁrst, we test the effect of different policy designs that vary on characteristics like beneﬁt type and eligibility. In the second, we select the two policy designs with the highest support in Study 1 and we test the effect of providing information about their cost on support. In each study, the heart of our analysis rests on random assignment of survey respondents to alternative renderings of the policy. We also look at the impact of demographic variables, in particular income and education, both for overall support and for their interaction with our experimental variables.
Recent Political Manifesto Commitments to Basic Income in Canada
Lindsay M. Tedds & Daria Crisan (University of Calgary)
We detail the political party commitments of a basic income in Canada over the last decade, a period of time in which we have seen renewed conversations about a basic income in Canada. We find that in all but one case the policy commitments lack any detail about design choices and no commitments to a basic income reference the principles of a basic income. Overall, at the political level there continues to be a lot of detail that have yet to be mapped out, detail that is important to understanding the specific commitment and whether the stated objectives could be achieved with the form of basic income proposed. In addition, the implementation of key technical elements seems poorly understood. These existing political commitments provide limited information that B.C.’s Expert Panel on Basic Income can use to inform any design decisions. This is unfortunate, as the policy debates on a basic income are unlikely to move forward in any definitive fashion without the details being flushed out.