Universal Basic Income as an instrument of regional development policy : a micro-macro economic analysis for Scotland

Connolly, Kevin and Eiser, David and Kumar, Ashwin and McGregor, Peter G. and Roy, Graeme (2021) Universal Basic Income as an instrument of regional development policy : a micro-macro economic analysis for Scotland. Regional Studies. ISSN 0034-3404 (https://doi.org/10.1080/00343404.2021.1957090)

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Abstract

Regional development now encompasses inclusive growth so that welfare spending becomes a potentially important policy for regions with devolved powers. Universal Basic Income (UBI), an unconditional payment to all citizens, has been gaining traction, including internationally. We provide a system-wide analysis of a region-specific UBI for Scotland on the level and distribution of regional activity. Using both micro- and macro-economic models we find that, although UBI has a beneficial effect on equity among households, it may adversely impact the level of economic activity unless there is a social contract in place and/ or there is a substantial stimulus to productivity.

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