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Is Basic Income a Cure for Unemployment in Unionized Economies? A General Equilibrium Analysis

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  • Bruno Van Der Linden

Abstract

This paper deals with the effect of basic income schemes on the equilibrium unemployment rate. It develops a dynamic general equilibrium model of a unionized economy where the budget of the State has to be balanced in each period. Compared to a benchmark situation with an unemployent insurance, it is shown that appropriately defined basic income schemes lower the steady-state unemployment rate. Moreover, the dynamic adjustment induced by such reforms can be Pareto-improving.

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  • Bruno Van Der Linden, 2002. "Is Basic Income a Cure for Unemployment in Unionized Economies? A General Equilibrium Analysis," Annals of Economics and Statistics, GENES, issue 66, pages 81-105.
    • Handle: RePEc:adr:anecst:y:2002:i:66:p:81-105
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    File URL: http://www.jstor.org/stable/20076330
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    Cited by:

    1. Alice Fabre & Stéphane Pallage & Christian Zimmermann, 2014. "Universal Basic Income versus Unemployment Insurance," Cahiers de recherche 1427, CIRPEE.
    2. Luke Haywood, 2014. "Unconditional Basic Income: An Economic Perspective," DIW Roundup: Politik im Fokus 33, DIW Berlin, German Institute for Economic Research.
    3. Pech Wesley J, 2010. "Behavioral Economics and the Basic Income Guarantee," Basic Income Studies, De Gruyter, vol. 5(2), pages 1-17, December.
    4. Etienne Lehmann, 2003. "Évaluation de la mise en place d’un système d’allocation universelle en présence de qualifications hétérogènes : le rôle institutionnel du salaire minimum," Économie et Prévision, Programme National Persée, vol. 157(1), pages 31-50.

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