Participation Income is able to solve the aff, but it avoids politics.

The concept of participation income (PI) was first introduced by Oxford and London School of Economics professor Anthony Atkinson (1944–2017) in 1996 when he published an article titled “The Case for a Participation Income” in The Political Quarterly (Atkinson 1996). Atkinson’s original discussion on PI was based on two arguments, which challenged the conventional view of citizen’s income as basic income was called at the time in the UK. First, Atkinson wanted to develop BI not as a replacement of social insurance but rather as an instrument to cut dependence on means-tested benefits. For a long time, Atkinson had been a strong opponent of means-testing (Atkinson and Micklewright 1991). PI would complement, rather than replace, existing social insurance benefits by reducing the number of people who must rely on income support or family credit, and by helping low-wage workers who need the means-tested scheme for their earnings top-up. This is an important difference between PI and those catch-all UBI proposals that would replace both means-tested welfare and social insurance. Social insurance would remain the default social security for a large part of the population (Atkinson 1996, 67). PI would also be complementary to a minimum wage (as would UBI in many proposals). Second, Atkinson expressed the belief “that it will be difficult to secure political support for a Citizen’s Income while it remains unconditional on labour market or other activity”. Atkinson pointed to the fact that several countries are anxious to ensure that social security works with, rather than against, the active labour market measures. Later, Atkinson (2015, 221) noted that reciprocity originating from participation criteria is “both intrinsically justified and more likely to garner political support”. This is an important shift in Atkinson’s argument, which will be discussed later in more detail.

At the bottom of both arguments was Atkinson’s concern for inequality and poverty. He devoted his academic career to inequality and poverty studies. After school, Atkinson volunteered in a hospital in a deprived part of Hamburg, Germany, which he later cited as a period when his interest in inequality started (Brandolini et al. 2018). Atkinson also credited the study The Poor and the Poorest, by Brian Abel-Smith and Peter Townsend (1965), as having a significant influence on his career goals. While being impressed by this landmark study of poverty in post-war Britain, Atkinson felt that it did not address what to do about the problem. As a response, Atkinson, a young scholar of Economics, published in 1969 his first book Poverty in Britain and the Reform of Social Security. At the time, poverty was not a fashionable subject for economists.

In 2014, Thomas Piketty, Atkinson’s mentoree and collaborator, published his bestselling book Capital in the Twenty-First Century, which drew popular attention to long-run trends in income inequality in the western world. Again, Atkinson wanted to take the discussion one step further and show how inequality could be reduced in practice. His magnum opus Inequality: What Can Be Done? (Atkinson 2015) included participation income in his comprehensive plan to reduce inequality. Atkinson (2014, 620–21) was concerned with ensuring “non-competitive equality of opportunity”, which he defined as everybody having an equal chance to fulfil their – independent – life projects:

To draw an athletic analogy, all can have the opportunity to acquire swimming certificates. In contrast, competitive equality of opportunity means only that we all have an equal chance to take place in a race – a swimming competition – where there are unequal prizes. In this, more typical, case, there are ex post unequal rewards, and it is here that inequality of outcome enters the picture. The concern that I want to address in this paper is that, even if there were competitive equality of opportunity, the reward structure is too inequal and that ex post inequality needs to be reduced.

Atkinson is known for both cutting-edge theory and the empirical analysis of data and policies. It is important to emphasize that PI was a part of Atkinson’s programme to restore the effectiveness of the welfare state in reducing inequality. It was by no means related to reduce social spending on social security. The aim of PI was to adjust the social security system to new labour market relationships and new forms of contribution. In an article titled “After Piketty?”, Atkinson (2014, 634) proposed EU-level PI by pointing out that the EU social policy rules call for an explicit agreement about the notion of participating in a particular society:

Proposing such an initiative would appear to fly in the face of decades of EU failure to make progress on social security harmonization. There are however two reasons for optimism. The first is that it [participation income] offers a solution to problems with which national governments are struggling – just as the early European institutions offered a solution to national problems of economic restructuring. The second is that the participation income is a new form of social security. There would be no question of imposing a national model on all Member States. It would not be Bismarckian or Beveridgean social insurance. It would be a twenty‐first-century route towards a Social Europe.

Later, Atkinson (Atkinson et al. 2017) presented PI as a response to difficulties the existing social insurance had in coping with “new social risks” associated with low pay, insecure intermittent employment and family dissolution. The problem is that increasing social insurance benefits would impact only those entitled to these benefits (which was seen during the COVID-19 pandemic). Similarly, extending coverage may not have immediate effects if additional entitlements will build up by more contributors/contributions. Atkinson concedes that a BI paid to everyone irrespective of means and living situation may offer some advantages with respect to new social risks in particular. However, he pointed out that the universal coverage would either be more costly or less generous. The statement is somewhat contradictory since in its original inception PI was meant to be a broadly inclusive quasi-universal programme which would exclude only people who really were “doing nothing” for political feasibility reasons. As a non-means-tested programme that would also be very costly.

In a simulation exercise for the UK, Atkinson with his co-authors (Atkinson et al. 2017, 308) defined participation income as follows:

existing insurance-based social protection and pension schemes remain in place but where recipients are below the PI they are brought up to it, whilst the PI partially substitutes for means-tested schemes which remain in place but include the PI in their income tests. In Atkinson’s formulation, the PI would be paid to adults meeting a participation condition, for example, caring for a child or an adult, seeking job training, doing voluntary work, doing paid work, etc., as well as those unable to participate due to ill-health or disability. Since this participation condition cannot be imposed in our simulation exercise due to lack of data, this is carried out on the basis that everyone is entitled.

The simulation compared PI with an alternative where a greatly increased child benefit scheme would become taxable in the hands of the parents (Atkinson et al. 2017). The latter option would considerably raise the average marginal effective tax rate on earners. In turn, that would also increase the mean participation tax rate, resulting from the fact that the benefits that would be lost on taking up employment are higher. However, the PI option would decrease the participation tax rate since PI is received both in and out of work. An additional advantage of the PI option is that it would reduce total spending on means-tested benefits by over one-half, because PI replaces a significant proportion of means-tested support. Even if a substantial number of households do not see an increase in net income, they are able to escape means-testing altogether. However, it is noteworthy that in the simulation no participation test was taken into account, but everybody was entitled to PI, which means as Malcom Torry (2016, 138) has noted that the simulation actually concerned BI.