Causal effects of minimum income schemes on poverty reduction: systematic review

Abstract Minimum income policies are a fiscal policy tool aimed at alleviating the effects of poverty and social exclusion, which have strongly emerged on government agendas. Despite their significant development over the past 15 years, driven by the political and social agenda, there is still limited and fragmented evidence on the causal effect that minimum income has on the two stated objectives. Through this systematic review, this paper compiles the available evidence regarding the causal effect, with the aim of synthesizing the existing empirical evidence and providing an element of analysis for the improvement of the design, implementation, and evaluation of the fiscal policies. The findings of this systematic review suggest that minimum income policies have a positive, albeit not always significant, effect on alleviating the poverty situations of citizens and their families and are less effective in the employment incorporation or retention in the labor market of their beneficiaries. This paper thus provides a synthesis of the available evidence, allowing for a deeper understanding of the effect of policies aimed at alleviating poverty through minimum income schemes and facilitating an improvement in the redesign of these policies, aimed at enhancing their effectiveness and also the efficiency of public spending.