An attempt to study the intra-household transfers generated by a Citizen’s Income scheme

The information that it is possible to extract from the EUROMOD [1] microsimulation programme without undertaking a substantial amount of work is limited. There are two main reasons for this:

  • Households come in a vast number of shapes and sizes, so results relating to individual families would be possible, but nothing more general than that. (Take, for example, a female lone parent with three children who is also looking after her elderly father. Any attempt at automatic sorting of the output data would turn this into a nuclear family.)
  • When I set up the Citizen’s Income schemes in the EUROMOD programme I allocated all Citizen’s Income amounts to the individuals concerned, including children. The programme then allocated the Child Citizen’s Incomes to the correct households, and because it was household disposable income in which I was interested, the programme was delivering the correct results. In order to study intra-household transfers we need to study what is happening to the incomes of individuals. Where there are no children present this is relatively easy: but where there are children in a family constituted by one male parent and one female parent, manual calculation is required. The programme can tell us what the Child Citizen’s Incomes add up to, and for each family unit I can manually work out what the gain or loss to the woman might be, and what the gain or loss to the man. But this doesn’t tell us much about what is happening to households in general.

 

One calculation that is possible is this:

I have divided the individual output results into men’s and women’s spreadsheets, and then calculated the total monthly disposable incomes for the men of the sample and for the women of the sample for both the existing tax and benefits system and for the Citizen’s Income scheme described as scheme B in the ISER paper Two Feasible Ways to Implement a Revenue Neutral Citizen’s Income Scheme. [2] I have then added the total cost of Child Citizen’s Incomes to the total disposable income for women generated by the Citizen’s Income scheme.

Dividing the difference between the total of men’s disposable incomes for the existing system and the Citizen’s Income scheme by the number of men in the FRS sample gives a mean disposable income loss for men of £65.13 per month.

Dividing the difference between the total of women’s disposable incomes for the existing system and the Citizen’s Income scheme (to which has been added the total cost of Child Citizen’s Incomes) by the number of women in the FRS sample gives a mean disposable income gain for women of £56.07 per month.

(The discrepancy between the two figures is because the ratio of women to men in the FRS sample is 1.15.)

Conclusion

If unconditional benefits for children continue to be allocated to the mother, then a fairly modest Citizen’s Income scheme that leaves in place means-tested benefits and recalculates them by taking into account each household’s total Citizen’s Incomes achieves a significant reallocation of resources from men to women.

Notes

[1] This paper uses EUROMOD version G2.0++. The contribution of all past and current members of the EUROMOD consortium is gratefully acknowledged. The process of extending and updating EUROMOD is financially supported by the Directorate General for Employment, Social Affairs and Inclusion of the European Commission [Progress grant no. VS/2011/0445.] The UK Family Resources Survey data was made available by the Department of Work and Pensions via the UK Data Archive. All remaining errors and interpretations are the author’s responsibility.

[2] Malcolm Torry, Two Feasible Ways to Implement a Citizen’s Income, Institute to Social and Economic Research Working Paper EM6/15, Colchester: Institute for Social and Economic Research, University of Essex, April 2015, www.iser.essex.ac.uk/research/publications/working-papers/euromod/em6-15

Footnotes

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