Towards a New Balance in Social Policy: The Future Role of Guaranteed Annual Income within the Safety Net

Peter Hicks

C.D. Howe Institute Commentary, 2017, issue 465

Abstract: Guaranteed Annual Incomes (GAI) proposals attracted much support in the 1960s and early 70s but, for a variety of reasons, they slipped off mainstream policy agendas in the following decades. They were too expensive given new budgetary priorities and implementation was difficult for jurisdictional reasons. Over time, the concept of poverty shifted away from focusing on lack of income towards the lack of resources that cause exclusion and that prevent people from developing their capacities to fully participate in society. Concerns increasingly focused on siloed programs that provided one-size-fits-all benefits, ignoring individual and family diversity. New research paints a different picture of poverty, one where traditional GAI programs are less useful than had been previously assumed. In particular, most periods of lowincome are relatively short, requiring supports that can only be awkwardly met by traditional tax-based GAI designs. As well, for the minority of low-income people who are persistently poor, the best solutions involve integrated mixes of income supports and, often, a variety of services. Yet, despite all the factors above, interest in GAI schemes has increased in recent years. This Commentary briefly reviews current proposals and explains that the resurgence of interest in them likely lies in a deep desire to make things better, in the lack of progress to date in fighting poverty, and in frustration with the inability of existing policy tools to get results. However, the Commentary argues that the effective, and affordable, way ahead lies not in big GAI programs taken in isolation, but rather in the use of newly available technology and data sources to steadily improve three kinds of programming: 1) integrated services tailored to individual needs, such as skill-enhancing programs that are intended to address unique needs of those who are persistently poor; 2) supporting people who can save for occasional periods of low-income by allowing more flexible access to income supports over the course of one’s life; and, 3) GAI programming that extends existing measures, such as supports directed to children, seniors and those with disabilities. This bottom-up reform based on an evidence-driven approach would have a better chance of succeeding if GAIs are realigned to support this vision.

Keywords: Education; Skills and Labour Market (search for similar items in EconPapers)
JEL-codes: I3 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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