Universal Basic Income Reforms and Household Composition : A Behavioural Microsimulation Analysis

Our research analyses the effects of changes in household composition on universal basic income reforms. Up to now, microsimulation research about UBI does not consider the behavioural responses due to a tax-benefit reform. We adopt a universal basic income reform, use two realistic extreme scenarios for household composition, and determine the performance in terms of inequality and poverty. Comparing this to the original tax-benefit system, we show that the poverty measure of universal basic income reacts more severe than in the original system. Therefore, we conclude that the inclusion of household composition should become standard practice in microsimulation research.