The Minimum Income Scheme as a poverty reduction mechanism: the case of the Basque Country

This paper analyses the impact of a Minimum Income Scheme (MIS), which operates in the Basque Country, one of the 17 Spanish Autonomous Regions, by assessing its efficacy in fighting poverty. We evaluate the effect or the MIS with respect to two different poverty measures. The first one is that defined by the administrative criteria of eligibility. The second one corresponds to Sen’s poverty measure that permits a simple decomposition of poverty into three different components, incidence, intensity and inequality. The results show that the MIS has reduced substantially all dimensions of poverty, even though there is scope for improvement both in coverage and efficiency.