Temporary Basic Income in Times of Pandemic: Rationale, Costs and Poverty-Mitigation Potential

Abstract

AbstractThe pandemic has exposed the costs of job and income losses. Emergency cash transfers can mitigate the worst immediate effects on people who lack access to safety nets. This research note provides estimates for a potential Temporary Basic Income (TBI) for poor and near-poor people across 132 developing countries, as well as the minimum cost of income support sufficient to mitigate the pandemic-induced poverty increase. The total monthly cost of the TBI ranges 0.27–0.63% of developing countries’ combined GDP, depending on the choice: (i) top-ups on each country’s average incomes up to a vulnerability threshold; (ii) transfers based on each country’s median standard of living; or (iii) uniform transfers. This note argues that some form of TBI is within reach and can inform a larger conversation about how to build comprehensive social protection systems that make the poor and near-poor more resilient to economic downturns in the future.