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Modelling the size, cost and health impacts of universal basic income: what can be done in advance of a trial?

Author

Listed:
  • Johnson, Matthew Thomas
  • Johnson, Elliott Aidan
  • Webber, Laura
  • Friebel, Rocco
  • Reed, Howard Robert
  • Lansley, Stewart
  • Wildman, John

Abstract

Opposition to Universal Basic Income (UBI) is encapsulated by Martinelli’s claim that ‘an affordable basic income would be inadequate, and an adequate basic income would be unaffordable’. In this article, we present a model of health impact that transforms that assumption. We argue that UBI can affect higher level social determinants of health down to individual determinants of health and on to improvements in public health that lead to a number of economic returns on investment. Given that no trial has been designed and deployed with that impact in mind, we present a methodological framework for assessing prospective costs and returns on investment through modelling to make the case for that trial. We begin by outlining the pathways to health in our model of change in order to present criteria for establishing the size of transfer capable of promoting health. We then consider approaches to calculating cost in a UK context to estimate budgetary burdens that need to be met by the state. Next, we suggest means of modelling the prospective impact of UBI on health before asserting means of costing that impact, using a microsimulation approach. We then outline a set of fiscal options for funding any shortfall in returns. Finally, we suggest that fiscal strategy can be designed specifically with health impact in mind by modelling the impact of reform on health and feeding that data cyclically back into tax transfer module of the microsimulation.

Suggested Citation

  • Johnson, Matthew Thomas & Johnson, Elliott Aidan & Webber, Laura & Friebel, Rocco & Reed, Howard Robert & Lansley, Stewart & Wildman, John, 2021. "Modelling the size, cost and health impacts of universal basic income: what can be done in advance of a trial?," LSE Research Online Documents on Economics 112516, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:112516
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    References listed on IDEAS

    as
    1. Kevin Milligan & Mark Stabile, 2009. "Child Benefits, Maternal Employment, and Children's Health: Evidence from Canadian Child Benefit Expansions," American Economic Review, American Economic Association, vol. 99(2), pages 128-132, May.
    2. Brent, Robert J., 2013. "A cost-benefit framework for evaluating conditional cash-transfer programs," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 4(2), pages 159-180, August.
    3. Daniel Nettle & Elliott Johnson & Matthew Johnson & Rebecca Saxe, 2021. "Why has the COVID-19 pandemic increased support for Universal Basic Income?," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-12, December.
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    More about this item

    Keywords

    health impact; modelling; social determinants; tax; Universal Basic Income;
    All these keywords.

    JEL classification:

    • N0 - Economic History - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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