Basic income or a single tapering rule? Incentives, inclusiveness and affordability compared for the case of Finland
The combination of different working-age benefits, childcare costs and income taxation creates complexity, reduces work incentives and holds back employment. This paper compares Finland’s benefit system with two benefit reform scenarios: a uniform benefit for all (“basic income”) and a universal tap...
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| Veröffentlicht in: | OECD Economic Department Working Papers 2018-04 (1464), p.0_1-30 |
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| creator | Pareliussen, Jon Hwang, Hyunjeong Viitamäki, Heikki |
| description | The combination of different working-age benefits, childcare costs and income taxation creates complexity, reduces work incentives and holds back employment. This paper compares Finland’s benefit system with two benefit reform scenarios: a uniform benefit for all (“basic income”) and a universal tapering rule (“universal credit”). The scenarios are modelled in the OECD TaxBen model and the TUJA microsimulation model. We find that replacing current benefits with a basic income would improve incentives for many, but with a drastic redistribution of income and likely increasing poverty as a result. Merging working-age benefits with similar aims and coordinating their tapering against earnings would on the other hand consistently improve work incentives and transparency, while preserving or improving social protection. |
| doi_str_mv | 10.1787/d8c0fbc4-en |
| format | Article |
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| source | Alma/SFX Local Collection |
| subjects | Age Aktivierende Arbeitsmarktpolitik Basic income Costs Earnings Economic models Finland Finnland Grundeinkommen Incentives Income redistribution Income taxes inequality Moving & housing expenses Net income Poverty Publishing Soziale Ungleichheit Sozialreform Tax credits Tax rates Tax reform Taxation Unemployment insurance Universal Credit welfare reform work incentives |
| title | Basic income or a single tapering rule? Incentives, inclusiveness and affordability compared for the case of Finland |
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