Abstract:

Regions are the main responsible for the social assistance policy in Spain. Recently, the Valencian Region has reformed its system, establishing the so-called Valencian Inclusion Income. In this paper, the economic impact of this program is calculated, based on an ex-ante estimation of the public expenditure to be made. The estimation allows to quantify the number of beneficiaries and the budgetary cost of this measure, and to compare these results with the other Autonomous Regions. The Valencian Region would be placed among the Spanish regions with the highest coverage rate and highest per capita expenditure.

Based on this budgetary cost, we calculate the economic impact of this measure over the Valencian economy, using the methodology of Input-Output Tables. If the direct, indirect and induced effects are taken into account, their impact will be very relevant in terms of production of goods and services and job creation. In addition, this program will have a noteworthy tax return for public administrations, which includes consumption taxes, but also income taxes and social contributions of the new jobs generated.

Reference:

Fuenmayor, A.; Granell, R.; Savall, T. (2019): Impacto económico de las rentas mínimas: la Renta Valenciana de Inclusión, Investigaciones Regionales / Journal of Regional Research, 44, pp. 97-110.