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Is UBI an efficient buffer against shocks?

Is unconditional basic income a viable alternative to other social welfare measures?

The crisis brought about by Covid-19 has prompted many economists and policymakers to rethink their stance on universal basic income (UBI). Once a hot topic for academic debates, the concept is now fast earning a place at the forefront of politicians’ minds. With soaring unemployment rates around the world, it may be prudent to take a closer look at the results of small-scale UBI trials undertaken in Finland and in the Canadian province of Manitoba.

IZA World of Labor contributor Ugo Colombino has explored the subject of whether unconditional basic income is a viable alternative to other social welfare measures. In his article, he writes that:

Designing income support policies that work well as both buffers against the volatility inherent in the global economy and as redistribution mechanisms for the gains from automation and globalization requires first considering how well current social assistance policies meet those goals.

Colombino then analyzes the impact the most recent recession had on the economy:

Many OECD countries have been suffering from high unemployment and job insecurity since the Great Recession in the late 2000s. [...] The post-2008 recession inflated the number of people in need of assistance and, in turn, the volume and complexities of social protection.

Economic reasoning and empirical evidence suggest that, under certain conditions, unconditional basic income might be an important policy innovation for redistributing gains from automation and globalization, building a buffer against shocks and systemic risks, and generating positive labor supply incentives among the poor.

While such a policy is simple and transparent, financing it might require higher taxes or cuts of other transfers, with efficiency and equality losses. Therefore, careful redesign of taxes and transfers is needed to obtain a net benefit from unconditional basic income.

Read the full article by Ugo Colombino:
Is unconditional basic income a viable alternative to other
social welfare measures?

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What is the economic impact of Covid-19 around the world?

Editor-in-chief Professor Dan Hamermesh commissioned conversations with experts from South Africa, Japan, Ireland, Chile, Germany, Sweden, Canada and Spain on the effects in their countries:

Find more national responses to Covid-19 here.

Read our latest news stories:

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New York’s mayor to furlough himself and staff to ease revenue shortfall

Bill de Blasio estimates the week-long furloughs of approximately 500 staff will save around US$1 million.

Singapore partners with Apple to encourage healthy behavior in its citizens

Singapore’s Health Promotion Board has partnered with global tech brand Apple to encourage healthy activity and behaviors in Singaporeans.

Education not the only solution to persistent deprivation in England

A new report published by England’s Social Mobility Commission suggests that education alone will not close the social mobility gap in areas of very low social mobility.

Senior IOC official vows Tokyo Olympics will take place in 2021 “with or without Covid”

With Japan’s borders still largely closed to foreign visitors and no vaccine in sight, many wonder whether it will be feasible to hold the Games.

Surviving Covid-19: Gig workers in Singapore

According to official figures, last year Singapore had 211,000 independent workers (9%), up from 200,000 in 2016.

French government to earmark €100 billion to save coronavirus-hit economy

Emmanuel Macron is to present a dramatic spending plan to save France's virus-hit economy.

Germany could provide a lesson in how to reopen schools in a pandemic

Coronavirus could be helping to reverse New Zealand’s brain drain

New Zealanders are currently returning home at rates much faster than anticipated.

Germany could provide a lesson in how to reopen schools in a pandemic

Germany closed its schools nation-wide as a result of the Covid-19 pandemic in mid-March.

Europe expecting a tsunami of job cuts

A new study by McKinsey & Company predicts millions of jobs are at risk as companies plan to downsize to offset the loss of business caused by the Covid-19 outbreak.

Upcoming events:

Joint IZA & Jaobs Center Workshop: Consequences of Covid-19 for Child and Youth Development, Oct 19-20 2020, Online
IZA Workshop: Labor Markets and the Phillips Curve: What Has Changed in the Past 60 Years?, Nov 20-21 2020, Online
10th Annual International Conference on Immigration in OECD Countries, Dec 07-08 - OECD Conference Centre, Paris
World Employment Conference 2020: Steering a labour market in transformation, Sept 07-08 2021 - Madrid, Spain

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Articles relating to pandemics and the labor market:

To read more, consult our key topic page Covid-19—
Pandemics and the labor market.

The Covid-19 pandemic is likely to have lasting economic and social impacts on employment, income, and working conditions in labor markets around the world.

IZA has therefore invited a number of experts to monitor individual countries' crisis responses on their
Crisis Response Monitoring site:

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Read the full article by Ugo Colombino: Is unconditional basic income a viable alternative to other social welfare measures?

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Related articles:

What is the economic impact of Covid-19 around the world? Editor-in-chief Professor Dan Hamermesh commissioned conversations with experts from South Africa, Japan, Ireland, Chile, Germany, Sweden, Canada and Spain on the effects in their countries: