Factors, pathways, and mechanisms through which universal basic income achieves economic impacts: a systematic review

Abstract

Although the potential outcomes of Universal Basic Income (UBI) have been extensively studied, existing literature has not been systematically scoped and synthesized to identify the factors, pathways, and mechanisms through which UBI achieves economic impacts. This systematic review addresses that gap by presenting a comprehensive conceptual framework that maps these analytical elements and their interplay. Guided by a PICO framework, the review examined a range of economic outcomes and employed contextual analysis and narrative synthesis across pilot studies, policy programs, and simulation models. The findings reveal the considerable complexity of implementing UBI in any context. Country-specific assessment and careful design are required due to several contextual differences such as country economic output size, demographics, levels of poverty and inequality, labour market characteristics, and tax-benefit systems. The review also finds that despite reported positive outcomes in poverty reduction, consumption and financial well-being, and financial feasibility, there are irrefutable trade-offs and structural shifts such as the tension between poverty reduction and increased taxation, the trade-off between UBI generosity and coverage (universality), and balancing the changes in the tax-benefit system and its distributive impact (inequality). Continued progress in UBI research requires country-specific applications, supported by a comprehensive analytical framework such as the one proposed in this review.