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Welfare and Basic Income: Theoretical Implication in The Slemrod / Work-Leisure Model, Graphical Interpretation

Author

Listed:
  • Ivaylo Beev

    (Department of Economics, University of National and World Economy, Sofia, Bulgaria)

  • Yanko Hristozov

    (Department of Finance, University of National and World Economy, Sofia, Bulgaria)

Abstract

The present study addresses the problem of basic income (BI), in its two varieties, as universal BI (UnBI) and as unconditional BI (UBI), with a view to the effect on individuals' well-being. For this purpose, Slemrod's general model was adapted and a graphical interpretation based on the standard leisure-time model was made. The use of the specific toolkit of ordinal utility theory makes it possible to identify an unexpected "externalities" - the emergence of a personal and social dilemma that generates crowding out-effect, which is able to eliminate the beneficial effects on the well-being of the introduction of BI into any of its forms, whether universal or unconditional. In this context, a proposal has been made (de lege ferenda), on the adaptation of the structure of the tax system that must incorporate the taxation of robotic labor: to successfully implement the BI conception.

Suggested Citation

  • Ivaylo Beev & Yanko Hristozov, 2020. "Welfare and Basic Income: Theoretical Implication in The Slemrod / Work-Leisure Model, Graphical Interpretation," Finance, Accounting and Business Analysis, University of National and World Economy, Institute for Economics and Politics, vol. 2(1), pages 35-41, May.
    • Handle: RePEc:aan:journl:v:2:y:2020:i:1:p:35-41
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