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Unconditional Basic Income: Who gets it? Who pays for it? A social Accounting Approach to Distribution

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  • Reich, Utz Peter
  • Santos, Susana

Abstract

Unconditional basic income is not a new topic in political economy, and it gains new momentum as more and more research is being devoted to it. The discussion focusses on the adequacy and effects such a policy measure may entail for a person and his socio-economic situation, usually. Object of investigation is the individual, and the corresponding theory is of micro-economic descent. In this paper, in contrast, we develop a method of how to assess feasibility and consequences of an unconditional basic income for a modern, open economy, on the macroeconomic level, using concepts and statistics of a Social Accounting Matrix (SAM) as our main tool. A SAM-based approach can measure, and perhaps model, the impact on the economic activity of a country, and on its economic institutions of new policy measures such as introducing an unconditional basic income. The economic activity of a country is expressed in monetary flows as registered in the National Accounts. So their underlying principles and definitions are adopted. However, the habitual way of putting an economy into a sequence of institutional accounts connecting each institution’s income to the cost, - similar to business accounting - reveals only one, namely the inner-institutional half of the economic circuit. The other, outer half, namely, how the costs of one institution generate income for another one is better captured by the format of a Social Accounting Matrix. In the paper, the impact of an unconditional basic income is quantified, for macroeconomic aggregates of institutional sectors and socio-economic groups of households, taking the German and the Portuguese economies as examples. Purpose of the paper is not to argue for, or against, an unconditional basic income, but to offer a scientific tool with which to calculate and assess possibilities and consequences of the proposal, for a national economy as a whole.

Suggested Citation

  • Reich, Utz Peter & Santos, Susana, 2018. "Unconditional Basic Income: Who gets it? Who pays for it? A social Accounting Approach to Distribution," MPRA Paper 88611, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:88611
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    References listed on IDEAS

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    3. Stone, Richard, 1986. "Nobel Memorial Lecture 1984: The Accounts of Society," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 5-28, January.
    4. Graham Pyatt, 1991. "SAMs, THE SNA AND NATIONAL ACCOUNTING CAPABILITIES," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(2), pages 177-198, June.
    5. Pyatt, Graham, 1988. "A SAM approach to modeling," Journal of Policy Modeling, Elsevier, vol. 10(3), pages 327-352.
    6. repec:bla:revinw:v:19:y:1973:i:2:p:143-66 is not listed on IDEAS
    7. Richard Stone, 1973. "A System Of Social Matrices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 19(2), pages 143-166, June.
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    Cited by:

    1. Susana Santos & Mónica Magaua, 2021. "Revisiting the informal aspects of the activity of countries, studied through Social Accounting and Socio-Demographic Matrices, with an application to Mozambique," Working Papers REM 2021/0198, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

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    More about this item

    Keywords

    Social Accounting Matrix; Unconditional Basic Income; Income Distribution.;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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