In 2021 I wrote my MSc thesis at Oxford's Department of Social Intervention and Policy Evaluation on a question the basic income debate had largely skipped: not whether a universal basic income is affordable in aggregate, but who, exactly, gains — and how the answer changes across ethnic groups. This is a short summary; the full thesis is available as a PDF at the end.

The aim

Around 30% of people of Asian and Black descent in the UK sit in the bottom income quintile, compared with roughly 18% of the White population (DWP, 2020). Yet the microsimulation literature on basic income, extensive at the country level, had said little about how schemes would play out across ethnic communities. The thesis set out to measure the income distributional effects of basic income schemes on different ethnic groups in the UK.

The method

The analysis uses UKMOD, the UK component of the EUROMOD static microsimulation platform, with 2018 Family Resources Survey data. Three revenue-neutral schemes were simulated, each funded by abolishing the personal tax allowance and removing the lower and upper limits on National Insurance contributions, with children receiving 45% of the adult payment:

  • Model A — base scenario: the payment the current tax system can support, around £417 per month for working-age adults.
  • Model B — Minimum Income Standard: a more generous payment benchmarked to the MIS, around £1,390 per month for adults, tax-free.
  • Model C — taxable MIS: the same benchmark but with the basic income itself taxable — the most progressive of the three.

For each scheme, a before-and-after snapshot of disposable income was compared, with results expressed as odds ratios across ethnicity, gender, and economic status.

Key takeaways

  • Southeast Asian, East Asian, and Arab ethnic groups gain the most across all three schemes.
  • Women gain more than men in every ethnic group — and women from the groups above gain most of all.
  • As schemes become more progressive, the redistribution comes mainly from White working-age adults to other groups.
  • Basic income narrows income gaps between groups with the same economic status but different ethnicity — ethnic-minority pensioners start at roughly £895 in weekly income against £1,300 for White pensioners, and the more progressive schemes close much of that gap.

Caveats

The results come with honest limitations. The underlying ethnicity data has a high share of missing values; the model is static, so it captures none of the behavioural responses a real scheme would trigger; and income is measured at the individual level, leaving open how households actually pool money. Each of these points to where follow-up research should go.

Download the full thesis (PDF) — “The Income Distributional Effects of Basic Income Schemes on Different Ethnic Groups in the UK: A Static Microsimulation”, University of Oxford, 2021.