Basic Income Costing
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Kevin Milligan
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Vancouver School of Economics
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UBC
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January 17, 2014.
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kevin.milligan@ubc.ca
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In this spreadsheet, I perform some very basic calculations of the cost of a Basic Income
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Here are some of the important choices I made for this calculation.
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* I used Survey of Labour and Income Dynamics, 2010. Persons file and Economic Family file.
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* excluded seniors from the analysis. For the families, I did this by excluding families with oldest member age 65 or higher
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* did not account for any behavioural response. Imposing this new system would affect the incentives to work and invest. Not accounted for here. These are potentially very important.
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* assumed BI was replacing existing social assistance program. Other transfer programs stay in place.
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* for phaseout of BI, I used reported total income less social assistance income and child benefit income.
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* I simulated two forms of BI. First, is a grant of $15,000 to each adult. Second, giving every family enough to be out of LICO low income.
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* For the second of these, I used LICO-1992-Before tax. I used before tax because the income I use to phase out the BI is before-tax, so everything is on before-tax basis.
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* For each of these two BI forms, I tried phase-out rates of 0,25,50,75,100 percent.
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* A 0% phaseout rate means that everyone gets the full grant; it is not phased out at all.
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* A 100% phaseout rate means that each dollar of other income completely displaces one dollar of BI until all BI is gone. Effectivly, an income floor or minimum income guarantee.
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* the 15,000 per person is done using the SLID persons file. The LICO grant is done using the Economic Family file.
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