Cash Transfers and Guaranteed Minimum Income Programs:
Research, Evaluation, and Policy
Prague, Czech Republic
September 9-10, 2024
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“The Envisioned Age-Indexed Basic Income Model”
Joni Askola, Charles University
This paper delves deeply into the intricacies of creating cost-effective Universal Basic Income programs. It draws insights from the findings of the Welfare State Scattergram (Askola & Davison, Politologija, 2023) and introduces a fresh policy alternative called Age-Indexed Basic Income. The Welfare State Scattergram sheds light on the prevalent trend of welfare states overspending on social welfare programs, exacerbating issues like inequality and weakening the effectiveness of their welfare state as a whole. This underscores the pressing need to ensure both the universality and affordability of redistribution programs. While a Universal Basic Income effectively addresses high non-take-up rates, it is extremely expensive and it does not replace most existing redistribution schemes. This cost issue can be exceptionally ticklish today, with most European governments having recently increased public debt levels due to the covid 19 crisis and war in Ukraine. Many European countries already had high levels of public debt before these crises. As a result, Universal Basic Income would likely require its implementation to cancel and replace several existing social programs to be sustainable financially. The envisioned Age-Indexed Basic Income model seeks to supplant numerous existing programs, such as minimum retirement pensions, child allowances, and student allowances, with the goal of enhancing the overall affordability of the program. Nonetheless, the introduction of this model brings complexities to its implementation process due to the replacement of multiple existing programs.
This paper utilizes the Welfare State Scattergram to assess welfare state outcomes and resilience. It also incorporates existing research on Universal Basic Income to evaluate the cost of mainstream versions and compare them with the new Age-Indexed model, highlighting its lower cost but more intricate policy process. Further research is recommended to comprehensively evaluate the net cost and economic implications of Age-Indexed Basic Income, paving the way for a systematic exploration of these complex and multifaceted issues. The insights provided also aim to inspire policymakers and practitioners to propose innovative and affordable versions of universal redistribution programs, ultimately fostering a more robust and functional welfare state.