TY  - RPRT
        AU  - Clavet, Nicholas-James
AU  - Duclos, Jean-Yves
AU  - Lacroix, Guy
        TI  - Fighting Poverty: Assessing the Effect of Guaranteed Minimum Income Proposals in Québec
        PY  - 2013/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 7283
        UR  - https://www.iza.org/publications/dp7283
        AB  - This paper analyzes the impact of a recent recommendation made by Quebec's Comité consultatif de lutte contre la pauvreté et l'exclusion sociale to guarantee every individual an income equal to 80% of Statistics Canada's Market Basket Measure (MBM). Workers with earnings at least equivalent to 16 weekly hours at the minimum wage would be entitled to 100% of the MBM. We also investigate the impact of three alternative proposals: 1) a change in the above the hours cut-off from 16 to 30 hours; 2) a guaranteed income equal to 100% of the MBM, irrespective of earnings; 3) a 3$/hour conditional wage subsidy. To do this, we first estimate a structural labor supply model using the existing tax code and predict the labor supply of a representative sample of individuals based upon the parameter estimates of the model.
Simulations show that the original recommendation would have strong negative impacts on participation rates of low-earners and that its cost would exceed $ 2 billion. Increasing the hours cut-off is predicted to have little impact beyond those of the original recommendation. Providing a guaranteed income equivalent to 100% of the MBM, on the other hand, would have a large impact. We find that contrary to what is usually assumed, guaranteed income schemes may increase the incidence of low-income rather than decrease it.
        KW  - public finance
KW  - labor market effects
KW  - poverty alleviation
KW  - ex ante evaluation
KW  - Guaranteed Minimum Income
KW  - financial cost
        ER  -