Are Budget Neutral Income Floors Fiscally Viable in Sub-saharan Africa?

Nora Lustig, Jon Jellema and Valentina Martinez Pabon
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Jon Jellema: CEQ Institute

No 86, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: Using microsimulations, we assess whether budget neutral universal income floors are fiscally viable in twelve SSA countries. We consider three universal basic income (UBI) scenarios of decreasing levels of generosity: poverty line, average poverty gap, and current spending on transfers and subsidies per person (spending neutral). The viability of the policies is assessed by comparing the results on poverty and average tax rates obtained from the simulated scenarios with those in the current system (baseline). We find that poverty line and poverty gap UBI programs would not be viable. Spending neutral UBI programs could potentially be viable in Botswana, Ghana and Zambia. If resources are targeted to the poor, a poverty line scenario is viable in Botswana, Ghana, Namibia, and South Africa.

Keywords: universal basic incomes; fiscal policy; fiscal incidence; poverty; fiscal impoverishment; taxes; sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: D31 H22 I38 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2021-03
New Economics Papers: this item is included in nep-afr
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Citations: View citations in EconPapers (3)

Published in Commitment to Equity, March 2021, pages 1-37

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http://repec.tulane.edu/RePEc/ceq/ceq86.pdf First version, 2021 (application/pdf)

Related works:
Journal Article: Are Budget Neutral Income Floors Fiscally Viable in Sub-Saharan Africa? (2023)
Working Paper: Are Budget Neutral Income Floors Fiscally Viable in Sub-Saharan Africa? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:86

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