Tackling inequality and poverty

The Centre for Analysis of Social Exclusion at the London School of Economics has published an Inequality and Poverty Policy Toolkit [1] which enables readers to study the different mechanisms that create both inequality and poverty and to evaluate a variety of policies that might reduce both poverty and inquality. A related report, Understanding the Relationship between Inequality and Poverty: Overview report, [2] contains research results relating to the relationship between inequality and poverty. The report concludes that inequality and poverty are closely linked; that only if inequality is tackled will poverty be reduced to any significant extent; that policies should therefore be sought that would reduce both inequality and poverty; and that reducing inequality would be unlikely to reduce economic growth.

One of the policy options discussed in the toolkit is an increase in universalism in the benefits system:

… Increasing the universal element of welfare policies would reduce any stigma and increase take-up. Moreover, especially in highly unequal societies, where public attitudes may be divided into ‘them’ and ‘us’ … , a more universalistic cash transfer system with a wider set of beneficiaries may attract more support and a more generous tax base, emphasising the role of redistribution as insurance required by everyone at different stages of life against periods of income vulnerability. … [3]

The toolkit discusses Citizen’s Basic Income:

… Supporters of a UBI have a variety of reasons to justify its institution: next to arguments related to dignity and human rights, there are arguments related to the simplicity the system, but also an emphasis on how UBI would allow to avoidance features of means-tested support – including stigma, disincentives and barriers to worker flexibility … . A libertarian argument sees UBI as potentially reducing the government involvement in people’s lives. The latter arguments would seem to face a substantial trade-off in terms of the higher marginal tax rates needed to finance the system as well as attributing a role to the state in giving some baseline level of financial support, even if recipients choose not to do anything to try to earn money for themselves. Moreover, there are concerns that UBI would reduce the progressivity of the current system. [4]

Our research shows that a revenue neutral Citizen’s Basic Income that would reduce both inequality and poverty is available for the UK. [5]

[1] http://sticerd.lse.ac.uk/case/_new/research/Inequalities_and_Poverty/policy-toolkit/default.asp

[2] http://sticerd.lse.ac.uk/dps/case/cr/casereport119.pdf

[3] http://sticerd.lse.ac.uk/case/_new/research/Inequalities_and_Poverty/policy-toolkit/resource-constraints-universalism.asp

[4] http://sticerd.lse.ac.uk/case/_new/research/Inequalities_and_Poverty/policy-toolkit/resource-constraints-universalism.asp

[5] https://citizensincome.org/research-analysis/updated-microsimulation-research-results-and-responses-to-questions/