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Universal basic income: A feasible alternative to move people out of poverty in Mexico?

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  • Caamal-Olvera, Cinthya G.
  • Huesca, Luis
  • Llamas, Linda

Abstract

This paper evaluates the effectiveness of social policy to alleviate poverty in Mexico; where poverty is persistent, social programs are numerous and complex to monitor. Our analysis uses MEXMOD tax-benefit microsimulation. We simulate four scenarios that grant direct money transfers to individuals in multidimensional poverty, elderly people, families with children under 15 years old, and a universal basic income. The more generous and broader the coverage is, the costlier the policies. The first-best policy is the universal basic income, which can eradicate extreme poverty at the cost of 10.61 % of the gross domestic product. The least effective policy transfers only to older people.

Suggested Citation

  • Caamal-Olvera, Cinthya G. & Huesca, Luis & Llamas, Linda, 2022. "Universal basic income: A feasible alternative to move people out of poverty in Mexico?," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 1077-1093.
    • Handle: RePEc:eee:jpolmo:v:44:y:2022:i:5:p:1077-1093
    DOI: 10.1016/j.jpolmod.2022.07.005
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    Cited by:

    1. La, Jung Joo, 2023. "The macroeconomic effects of basic income funded by a land-holding tax in Korea," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 1-9.
    2. La, Jung Joo, 2023. "Macroeconomic effects of basic income funded by land holding tax," MPRA Paper 116151, University Library of Munich, Germany.

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    More about this item

    Keywords

    Poverty; Universal basic income; Conditional transfers; Microsimulation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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