| By: |
Dogan, Berna;
Tekgüç, Hasan;
Yeldan, A. Erinç |
| Abstract: |
The limited success of employment-based social protection measures under the
diverging patterns of post-covid recovery rekindled the interest in a social
policy framework known as the Basic Income (BI) support. The goal of this
study is to assess the macroeconomic feasibility of a BI policy for Turkey
with a green design. We test the potential of the BI program using five
alternative scenarios distinguished by coverage of the receivers and their
respective fiscal costs. We then employ an applied general equilibrium model
to analyze the economy-wide effects and welfare implications for Turkey in the
long-run through 2030. The dynamic macro results of our modeling effort
indicate that BI has the potential for a significant social welfare enhancing
impact for Turkey; yet, pursuing the BI mandate without any compensating
fiscal consolidation is not manageable in the medium to longer run. To achieve
the warranted policy space we evaluate the macroeconomic and welfare effects
of an alternative fiscal program comprising of (i) carbon tax levied on the
fossil fuel producing industry, (ii) corporate income taxation policy reform
that aims at expanding the revenue base and consolidation of the fiscal space
of the government, and (iii) re-structuring of public consumption expenditures
by introducing rationality and efficiency in the structure of fiscal
expenditures. Our model solutions reveal that a green BI scenario not only
achieves a higher GDP and welfare in the medium to long run, but also helps
Turkey to reduce its carbon emissions in line with the global policy
challenges of a green recovery. |
| Keywords: |
Environmental Economics and Policy |
| Date: |
2022 |
| URL: |
https://d.repec.org/n?u=RePEc:ags:pugtwp:333496 |