The effect of guaranteed minimum income scheme in Spain

The effect of guaranteed minimum income scheme in Spain: A view from bank accounts

Proposals of Universal Basic Income and Guaranteed Minimum Income are attracting a lot of attention in high-income countries. In this paper we analyze the impact of a program of Guaranteed Minimum Income (Ingreso Mínimo Vital), also known as IMV, that was implemented in Spain starting in May of 2020. Opposite to the traditional methods to analyze this type of programs, that use small experimental set-ups, we rely on the information available in bank accounts. The only procedure to deliver the IMV to their beneficiaries is a transfer to a bank account. This procedure identifies precisely the recipients of the IMV by the code of the transfer. We review the existing research on outcomes related to minimum income schemes and discuss the advantages of the roll-out of IMV across Spain to identify their impact. We present some preliminary results in relation to labor market participation and financial inclusion. Some areas for further development of this work are also discussed.

José García-Montalvo is Professor of Economics and Research Professor at the BSE and the IVIE. He is also professor of economics at the Universitat Pompeu Fabra. He holds a PhD in Economics from Harvard University. His areas of research include the banking and real estate markets, higher education and development and conflict.