Rethinking social assistance amid the COVID-19 pandemic: Guaranteeing the right to income security in Ecuador

Abstract

In the face of increased uncertainty and a slow economic recovery, it is crucial to protect populations from the effects of systemic crises beyond the narrow goal of poverty reduction. In Ecuador, social assistance programs had little effect in reducing earnings losses caused by the COVID-19 pandemic, leading to a renewed discussion on the implementation of a universal basic income (UBI). This study evaluates the potential impact of social assistance reforms using tax-benefit microsimulation techniques. Four simulated counterfactual reforms are assessed, ranging from an extension of current social assistance programs to the implementation of UBI, which would replace existing programs and be partially funded through progressive personal income tax and social security contributions. Our findings demonstrate that poverty and inequality would decrease significantly under the more generous UBI scenarios. This research contributes to the ongoing debate on the potential benefits of UBI in reducing poverty and inequality and emphasizes the importance of considering alternative social assistance reforms in the face of growing systemic challenges.