Effect of a basic income on the Brazilian economy measured by the input-output matrix

Abstract

The study assesses the distributive and macroeconomic impacts of a Universal Basic Income of R$ 422,00 per month per person in Brazil, using a microsimulation and input output approach based on the Leontief Miyazawa model. It relies on data from the 2019 Continuous National Household Sample Survey, the 2017/2018 Household Budget Survey, and Brazil’s 2019 input-output matrix. Funded through a flat income tax, the UBI redistributes income from the richest to the poorest, increasing the share of total income held by the bottom 50% and redirecting consumption toward sectors such as food, retail, and domestic services. Compared to the baseline scenario, it results in structural gains of 8% in income, 10% in output, and 11% in employment, with strong effects in labor-intensive sectors. Despite a fiscal cost of 11% of GDP and continued income concentration among the wealthiest, the UBI reduces inequality and stimulates economic activity, offering evidence to support its feasibility in Brazil.