Basic Income in Belgium: stress-testing basic income in the digital era

A basic income (BI) differs radically from traditional public benefits because it breaks the link between contribution and benefit on the one hand and between need and benefit on the other. Although a BI is often presented as a simple idea, discussing concrete policy proposals quickly ends in a Tower of Babel-like argument. In many of these debates, it appears that proponents, and respectively opponents, often have different types of BI schemes in mind when advocating or criticizing the idea. However, it is quite clear that the actual outcomes of a BI will depend largely on the concrete policy design in terms of eligibility, eligibility criteria, benefit levels, financing, and implementation modalities. These aspects will have a major impact on the extent to which a BI will encourage or discourage paid work or any work at all, increase or decrease gender inequality in work and care, and end the myriad problems associated with income-dependent welfare benefits. Unfortunately, we lack empirical research on many of these outcomes. This is the main focus of the BAsic income in BELgium (BABEL) project. The BABEL project aims to close the gap between dream and deed regarding basic income. The project has several objectives. First, it aims to investigate the actual labour supply effects of BI. To this end, a quasi-experimental approach is applied, where we use administrative data to estimate the labor supply effects of BI based on what comes closest to a real basic income situation: the Belgian Win-for-Life lottery. Second, to estimate the potential effects of BI and its different variants, an extensive microsimulation exercise will be conducted to estimate the first-order income distribution and budgetary effects of a range of BI proposals and their effect on labor incentives in Belgium. Third, by conducting vignette experiments, the project will gain a deeper understanding of public support for the implementation of a range of basic income propositions in Belgium, and whether and to what extent public support for different basic income propositions depends on their outcomes, financing, and implementation details. Fourth, the BABEL project will pay due attention to the on-the-ground implementation and technical and administrative feasibility of a selection of basic income policy proposals, and will assess the extent to which political parties and social partners as gatekeepers in the Belgian welfare state are willing to support the implementation of these schemes. Finally, the project will present a blueprint of pathways for basic income proposals that (1) are likely to receive sufficient support from the general public and social partners; (2) lead to improved social protection outcomes and work incentives; and (3) can inspire viable welfare reform in Belgium.