Abstract
A central task in efforts to identify pathways to ecologically and socially sustainable economies is to reduce inequality and poverty while reducing material consumption, which has recently inspired future post-growth scenarios. We build a model to explore the potential of a universal basic income (UBI) to serve these objectives. Starting from the observation that post-growth trajectories can take very different forms we analyze UBI in two scenarios advanced in the literature. Comparing UBI in a “local self-sufficiency” economy to a UBI in an “automation” economy, we show that although both scenarios satisfy central sustainability criteria, the impact of a UBI would differ greatly between these contexts. Our analysis shows that a UBI is less compatible with a labor-intensive local self-sufficiency economy than a capital-intensive, high tech economy. We conclude that the feasibility and attractiveness of a UBI in a post-growth scenario depends greatly on the specific characteristics of the economy.
Appendix I Equations and definitions
Lr = flow of labor, real units
Lm = flow of labor, monetary units
Kr = flow of capital, real units
Km = flow of capital, monetary units
LCreln = Labor use for commodity n, %
LCabsrn = Labor use for commodity n, real units
LCabsmn = Labor use for commodity n, monetary units
KCreln = Capital use for commodity n, %
KCabsrn = Capital use for commodity n, real units
KCabsmn = Capital use for commodity n, monetary units
Yrn = Production of commodity n, real units
Ymn = Production of commodity n, monetary units
D = Price level (deflator)
Prn = Relative price of commodity n, monetary unit per real unit
ILm = Labor income of income decile m, monetary units
IKm = Capital income of income decile m, monetary units
T = tax rate, %
R = public revenue, monetary units
s = part of R used for public consumption, %
PC = public consumption, monetary units
BI = basic income, monetary units
TImm = total income of income decile m, monetary units
TIrm = total income of income decile m, real units
DImm = disposable income of income decile m, monetary units
DIrm = disposable income of income decile m, real units
Production and Relative Prices of Goods and Services
Real use of labor and capital, Lr and Kr, are set by the model user
Monetary use of labor and capital are fixed in the model: Lm = 67, Km = 33
The relative distribution of capital between the three commodities is fixed in the model:
The relative distribution of labor between the three commodities is a function of the relative capital intensity of the economy:
The function is designed so that LCrel3 asymptotically approaches zero with growing capital intensity.
Production is Determined by the Sum of Inputs
The general price level is determined by the ratio between real inputs (and output) and monetary inputs (and output)
The relative prices of the three commodities are determined by the relation between the monetary value of production and the real quantity of production of each commodity:
Distribution of Income
The pre-distribution of income, IL1, IL2, … ILm and IK1, IK2, … IKm, is defined by the user of the model, so that IL1 + IL2 + … + ILm = 100 and IK1 + IK2 + … + IKm = 100.
Redistribution is handled by a flat tax on labor and capital incomes. The tax rate, T, is set by the model user. Public revenue is given by:
Public revenue is distributed between public consumption and basic income so that
Total income includes after-tax labor and capital incomes, public consumption and basic income:
Disposable income includes after-tax labor and capital incomes and basic income:
Real incomes are given by monetary incomes multiplied by the price level.
Appendix II Results
In this appendix income distributions are shown in the scenarios in monetary units (Table A1, A3, A5 and A7) and real units (Table A2, A4, A6 and A8), respectively.
Distribution of different incomes in the Base case zero, monetary units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0.0 | 0 | 0 | 0.0 | 2.5 | 2.5 |
| Decile 2 | 1.0 | 0 | 0 | 1.0 | 2.5 | 3.5 |
| Decile 3 | 2.0 | 0 | 0 | 2.0 | 2.5 | 4.5 |
| Decile 4 | 2.5 | 0 | 0 | 2.5 | 2.5 | 5.0 |
| Decile 5 | 4.5 | 0 | 0 | 4.5 | 2.5 | 7.0 |
| Decile 6 | 5.5 | 0 | 0 | 5.5 | 2.5 | 8.0 |
| Decile 7 | 6.6 | 0 | 0 | 6.6 | 2.5 | 9.0 |
| Decile 8 | 7.6 | 0 | 0 | 7.6 | 2.5 | 10.0 |
| Decile 9 | 9.1 | 0.2 | 0 | 9.3 | 2.5 | 11.8 |
| Decile 10 | 11.6 | 24.6 | 0 | 36.2 | 2.5 | 38.7 |
| Sum | 50 | 24.8 | 0 | 75 | 25 | 100 |
Distribution of different incomes in the Base case zero, real units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0 | 0 | 0 | 0 | 2.5 | 2.5 |
| Decile 2 | 1.0 | 0 | 0 | 1.0 | 2.5 | 3.5 |
| Decile 3 | 2.0 | 0 | 0 | 2.0 | 2.5 | 4.5 |
| Decile 4 | 2.5 | 0 | 0 | 2.5 | 2.5 | 5.0 |
| Decile 5 | 4.5 | 0 | 0 | 4.5 | 2.5 | 7.0 |
| Decile 6 | 5.5 | 0 | 0 | 5.5 | 2.5 | 8.0 |
| Decile 7 | 6.6 | 0 | 0 | 6.6 | 2.5 | 9.0 |
| Decile 8 | 7.6 | 0 | 0 | 7.6 | 2.5 | 10.0 |
| Decile 9 | 9.1 | 0.2 | 0 | 9.3 | 2.5 | 11.8 |
| Decile 10 | 11.6 | 24.6 | 0 | 36.2 | 2.5 | 38.7 |
| Sum | 50 | 24.8 | 0 | 75 | 25 | 100 |
Distribution of different incomes in the Base case scenario, monetary units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0 | 0 | 3.0 | 3.0 | 2.5 | 5.5 |
| Decile 2 | 0.6 | 0 | 3.0 | 3.6 | 2.5 | 6.1 |
| Decile 3 | 1.2 | 0 | 3.0 | 4.2 | 2.5 | 6.7 |
| Decile 4 | 1.5 | 0 | 3.0 | 4.5 | 2.5 | 7.0 |
| Decile 5 | 2.7 | 0 | 3.0 | 5.7 | 2.5 | 8.2 |
| Decile 6 | 3.3 | 0 | 3.0 | 6.3 | 2.5 | 8.8 |
| Decile 7 | 3.9 | 0 | 3.0 | 6.9 | 2.5 | 9.4 |
| Decile 8 | 4.5 | 0 | 3.0 | 7.5 | 2.5 | 10.0 |
| Decile 9 | 5.4 | 0.1 | 3.0 | 8.6 | 2.5 | 11.1 |
| Decile 10 | 6.9 | 14.7 | 3.0 | 24.7 | 2.5 | 27.1 |
| Sum | 30 | 14,9 | 30 | 75 | 25 | 100 |
Distribution of different incomes in the Base case scenario, real units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0 | 0 | 3 | 3 | 2.5 | 5.5 |
| Decile 2 | 0.6 | 0 | 3 | 3.6 | 2.5 | 6.1 |
| Decile 3 | 1.2 | 0 | 3 | 4.2 | 2.5 | 6.7 |
| Decile 4 | 1.5 | 0 | 3 | 4.5 | 2.5 | 7.0 |
| Decile 5 | 2.7 | 0 | 3 | 5.7 | 2.5 | 8.2 |
| Decile 6 | 3.3 | 0 | 3 | 6.3 | 2.5 | 8.8 |
| Decile 7 | 3.9 | 0 | 3 | 6.9 | 2.5 | 9.4 |
| Decile 8 | 4.5 | 0 | 3 | 7.5 | 2.5 | 10.0 |
| Decile 9 | 5.4 | 0.1 | 3 | 8.6 | 2.5 | 11.1 |
| Decile 10 | 6.9 | 14.7 | 3 | 24.7 | 2.5 | 27.1 |
| Sum | 30 | 14.9 | 30 | 75 | 25 | 100 |
Distribution of different incomes in the Local self-sufficiency scenario, monetary units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0.0 | 0 | 3.7 | 3.7 | 2.5 | 6.2 |
| Decile 2 | 0.5 | 0 | 3.7 | 4.2 | 2.5 | 6.7 |
| Decile 3 | 1.0 | 0 | 3.7 | 4.7 | 2.5 | 7.2 |
| Decile 4 | 1.3 | 0 | 3.7 | 5.0 | 2.5 | 7.5 |
| Decile 5 | 2.3 | 0 | 3.7 | 6.0 | 2.5 | 8.5 |
| Decile 6 | 2.8 | 0 | 3.7 | 6.5 | 2.5 | 9.0 |
| Decile 7 | 3.3 | 0 | 3.7 | 7.0 | 2.5 | 9.5 |
| Decile 8 | 3.8 | 0 | 3.7 | 7.5 | 2.5 | 10.0 |
| Decile 9 | 4.6 | 0.1 | 3.7 | 8.4 | 2.5 | 10.9 |
| Decile 10 | 5.9 | 12.4 | 3.7 | 22.0 | 2.5 | 24.5 |
| Sum | 25 | 12.5 | 37 | 75 | 25 | 100 |
Distribution of different incomes in the Local self-sufficiency scenario, real units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0 | 0 | 3 | 3 | 2.0 | 5.1 |
| Decile 2 | 0.4 | 0 | 3 | 3.5 | 2.0 | 5.5 |
| Decile 3 | 0.8 | 0 | 3 | 3.9 | 2.0 | 5.9 |
| Decile 4 | 1.0 | 0 | 3 | 4.1 | 2.0 | 6.1 |
| Decile 5 | 1.9 | 0 | 3 | 4.9 | 2.0 | 7.0 |
| Decile 6 | 2.3 | 0 | 3 | 5.3 | 2.0 | 7.4 |
| Decile 7 | 2.7 | 0 | 3 | 5.8 | 2.0 | 7.8 |
| Decile 8 | 3.1 | 0 | 3 | 6.2 | 2.0 | 8.2 |
| Decile 9 | 3.8 | 0.1 | 3 | 6.9 | 2.0 | 8.9 |
| Decile 10 | 4.8 | 10.2 | 3 | 18.0 | 2.0 | 20.1 |
| Sum | 21 | 10.3 | 31 | 62 | 20 | 82 |
Distribution of different incomes in the Automation scenario, monetary units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0.0 | 0 | 3 | 3.0 | 2.5 | 5.5 |
| Decile 2 | 0.6 | 0 | 3 | 3.6 | 2.5 | 6.1 |
| Decile 3 | 1.2 | 0 | 3 | 4.2 | 2.5 | 6.7 |
| Decile 4 | 1.5 | 0 | 3 | 4.5 | 2.5 | 7.0 |
| Decile 5 | 2.7 | 0 | 3 | 5.7 | 2.5 | 8.2 |
| Decile 6 | 3.3 | 0 | 3 | 6.3 | 2.5 | 8.8 |
| Decile 7 | 3.9 | 0 | 3 | 6.9 | 2.5 | 9.4 |
| Decile 8 | 4.5 | 0 | 3 | 7.5 | 2.5 | 10.0 |
| Decile 9 | 5.4 | 0.1 | 3 | 8.6 | 2.5 | 11.1 |
| Decile 10 | 6.9 | 14.7 | 3 | 24.7 | 2.5 | 27.1 |
| Sum | 30 | 14.9 | 30 | 75 | 25 | 100 |
Distribution of different incomes in the Automation scenario, real units – share of total GDP.
| Labor income | Capital income | Basic income | Disposable income | Public consumption | Total income | |
|---|---|---|---|---|---|---|
| Decile 1 | 0 | 0 | 3 | 3 | 2.5 | 5.5 |
| Decile 2 | 0.6 | 0 | 3 | 3.6 | 2.5 | 6.1 |
| Decile 3 | 1.2 | 0 | 3 | 4.2 | 2.5 | 6.7 |
| Decile 4 | 1.5 | 0 | 3 | 4.5 | 2.5 | 7.0 |
| Decile 5 | 2.7 | 0 | 3 | 5.7 | 2.5 | 8.2 |
| Decile 6 | 3.3 | 0 | 3 | 6.3 | 2.5 | 8.8 |
| Decile 7 | 3.9 | 0 | 3 | 6.9 | 2.5 | 9.4 |
| Decile 8 | 4.5 | 0 | 3 | 7.5 | 2.5 | 10.0 |
| Decile 9 | 5.4 | 0.1 | 3 | 8.6 | 2.5 | 11.1 |
| Decile 10 | 6.9 | 14.7 | 3 | 24.7 | 2.5 | 27.1 |
| Sum | 30 | 14.9 | 30 | 75 | 25 | 100 |
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