An OECD economist argues that Universal Credit is better than Basic Income

I was surprised to read a report from the Helsinki Times, that the OECD is recommending Finland to forget about Basic Income and adopt Universal Credit instead.  It took me a little while to find the source; it’s in a blog post written by Jon Kristian Pareliussen.  He  had previously expressed his appreciation for Universal Credit in a paper written in 2013, when the system was still imaginary rather than practical.  Even at that time, the idea that work incentives would be preserved by a marginal rate of deduction of possibly three-quarters – that’s the combined effect of tax or NI plus the loss of  UC – was fantasy.

The OECD’s opposition of Basic Income has a rather stronger foundation.   Last year’s report on Basic Income explained that in each of the countries they looked at, schemes for a Basic Income were likely to leave many poor people worse off.  What Basic Income wouldn’t do is to undermine work incentives, because there is no added marginal rate of deduction.


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