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UPA Perpustakaan Universitas Jember

Mechanics of replacing benefit systems with a basic income: comparative results from a microsimulation approach

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Recent debates of basic income (BI) proposals shine a useful spotlight on the
challenges that traditional forms of income support are increasingly facing, and highlight
gaps in social provisions that largely depend on income or employment status. A universal
“no questions asked” public transfer would be simple and have the advantage that no-one
would be left without support. But an unconditional payment to everyone at meaningful but
fiscally realistic levels would likely require tax rises as well as reductions in existing benefits.
We develop a comprehensive BI scenario that facilitates an assessment of the resulting
fiscal and distributional effects in a comparative context, undertake a microsimulation study
to quantify them, and propose a simple decomposition to identify the mechanisms that drive
effects in different country contexts. Results illustrate the challenges, but also the strengths

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