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Which Way Forward for Economic Security: Basic Income or Public Services?

  • Tom Malleson EMAIL logo and David Calnitsky
From the journal Basic Income Studies

Abstract

Economic insecurity is an endemic problem across the rich countries of the Global North. What is the solution? This paper compares and contrasts two major proposals: the conventional welfare state package of public services and regulations versus a basic income. By comparing and contrasting these systems in three different contexts – a “nightwatchman” context, a neoliberal context, and a social democratic context – and carefully modeling the monetary equivalence between them, we are able to provide a more precise and compelling comparison of the two systems than has yet been accomplished. We evaluate the two systems on the basis of economic security as well as a number of other important criteria, including the economic well-being of oppressed groups, power, carbon emissions, the gender division of labor, free time, social stigma, and transformative potential. We find that without a welfare state background, services and regulations are generally preferable for most vulnerable groups. However, as the welfare state develops, into a neoliberal or a social democratic context, basic income becomes a generally superior option.

JEL Classification: E61; J48

Corresponding author: Tom Malleson, Social Justice and Peace Studies, King’s University College – University of Western Ontario, London, Canada, E-mail:

Appendix

Table A1:

Incentives to work in BI versus services regimes

Employed Unemployed Incentive to work Evaluation
(1) BI (k) (2) Ser. (k) (3) BI (k) (4) Ser. (k) (5) BI empl gain (k) (6) Ser. empl gain (k) (7) Inc. diffs.
(1–3) (2–4) (5–6)
Nightwatchman Context
Homeless $0.0 $0.0 $16.0 $16.0 −$16.0 −$16.0 $0.0
Single mother, full-time, min-wage, young child $34.4 $35.9 $24.0 $34.6 $10.4 $1.3 $9.1
Single mother, full-time, min-wage, child in school $34.4 $23.8 $24.0 $22.5 $10.4 $1.3 $9.1
Single person, full-time, min-wage $26.4 $23.8 $16.0 $16.0 $10.4 $7.8 $2.6
Single person, PT, min-wage $23.8 $18.6 $16.0 $16.0 $7.8 $2.6 $5.2
Person with a disability $26.4 $28.1 $16.0 $20.3 $10.4 $7.8 $2.6
Black, Indigenous, or Person of Color, FT, working-class $31.6 $38.2 $16.0 $20.0 $15.6 $18.2 −$2.6
Black. Indigenous, or Person of Color, PT. min-wage $23.8 $22.6 $16.0 $20.0 $7.8 $2.6 $5.2
White, FT, working-class $31.6 $34.2 $16.0 $16.0 $15.6 $18.2 −$2.6
White, PT, working-class $27.7 $26.4 $16.0 $16.0 $11.7 $10.4 $1.3
Working class two parent family, two school age kids $79.2 $68.4 $48.0 $32.0 $31.2 $36.4 −$5.2
Elderly low-income $0.0 $0.0 $16.0 $16.0 −$16.0 −$16.0 $0.0
Neoliberal Context
Homeless $0.0 $0.0 $16.0 $16.0 −$16.0 −$16.0 $0.0
Single mother, full-time, min-wage, young child $34.4 $31.2 $24.0 $29.9 $10.4 $1.3 $9.1
Single mother, full-time, min-wage, child in school $34.4 $23.8 $24.0 $22.5 $10.4 $1.3 $9.1
Single person, full-time, min-wage $26.4 $23.8 $16.0 $16.0 $10.4 $7.8 $2.6
Single person, PT, min-wage $23.8 $18.6 $16.0 $16.0 $7.8 $2.6 $5.2
Person with a disability $26.4 $32.5 $I 6.0 $24.7 $I 0.4 $7.8 $2.6
Black, Indigenous, or Person of Color, FT, working-class $31.6 $36.2 $16.0 $18.0 $15.6 $18.2 −$2.6
Black, Indigenous, or Person of Color, PT, min-wage $23.8 $20.6 $16.0 $18.0 $7.8 $2.6 $5.2
White, FT, working-class $31.6 $34.2 $16.0 $16.0 $15.6 $18.2 −$2.6
White, PT, working-class $27.7 $26.4 $16.0 $16.0 $11.7 $10.4 $1.3
Working class two parent family, two school age kids $79.2 $68.4 $48.0 $32.0 $31.2 $36.4 −$5.2
Elderly low-income $0.0 $0.0 $16.0 $16.0 −$16.0 −$16.0 $0.0
Social democratic context
Homeless $0.0 $0.0 $19.4 $18.4 −$19.4 −$18.4 −$1.0
Single mother, full-time, min-wage, young child $45.6 $43.2 $35.2 $41.9 $10.4 $1.3 $9.1
Single mother, full-time, min-wage, child in school $37.8 $26.2 $27.4 $24.9 $10.4 $1.3 $9.1
Single person, full-time, min-wage $29.8 $26.2 $19.4 $18.4 $10.4 $7.8 $2.6
Single person, PT, min-wage $27.2 $21.0 $19.4 $18.4 $7.8 $2.6 $5.2
Person with a disability $40.2 $44.8 $29.8 $37.0 $I 0.4 $7.8 $2.6
Black, Indigenous, or Person of Color, FT, working-class $39.0 $46.6 $23.4 $28.4 $15.6 $18.2 −$2.6
Black, Indigenous, or Person of Color, PT, min-wage $31.2 $31.0 $23.4 $28.4 $7.8 $2.6 $5.2
White, FT, working-class $35.0 $36.6 $19.4 $18.4 $15.6 $18.2 −$2.6
White, PT, working-class $31.1 $28.8 $19.4 $18.4 $11.7 $10.4 $1.3
Working class two parent family, two school age kids $86.0 $73.2 $54.8 $36.8 $31.2 $36.4 −$5.2
Elderly low-income $0.0 $0.0 $19.4 $18.4 −$19.4 −$18.4 −$1.0
  1. If Column 7 is positive, incentives to work under BI are greater, if negative incentives to work under services arc greater. Columns 1–4 are post-transfer final incomes pulled from Tables 35. All figures are in thousands of USD.

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Received: 2021-02-10
Accepted: 2021-04-23
Published Online: 2021-05-18

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