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A quantitative evaluation of universal basic income

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  • Conesa, Juan Carlos
  • Li, Bo
  • Li, Qian

Abstract

We provide a quantitative evaluation of the impact of Universal Basic Income (UBI) as an alternative to the existing system of means-tested transfers. We explore varying levels of UBI generosity, paired with different strategies to finance it. All the reforms we consider result in welfare losses for a huge majority of initial households. Moreover, these losses are increasing in UBI generosity. A reform financed with consumption taxes implies lower efficiency losses than reforms financed with income taxes, but fewer individuals benefit from it.

Suggested Citation

  • Conesa, Juan Carlos & Li, Bo & Li, Qian, 2023. "A quantitative evaluation of universal basic income," Journal of Public Economics, Elsevier, vol. 223(C).
    • Handle: RePEc:eee:pubeco:v:223:y:2023:i:c:s0047272723000634
    DOI: 10.1016/j.jpubeco.2023.104881
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    2. Kitae Cho & Eunseong Ma, 2024. "Designing Optimal Progressive Taxation with Hours Constraints," Working papers 2024rwp-231, Yonsei University, Yonsei Economics Research Institute.

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    More about this item

    Keywords

    Incomplete market; Heterogeneous agents; Learning by doing; Consumption floor; Consumption tax; Universal basic income; Transitional dynamics;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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