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Universal basic income and skill -biased technological change

Author

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  • José Coelho

    (Nova School of Business and Economics)

Abstract

In the last decades, income inequality has been on the rise in the U.S. The growing skill premium suggests the pivotal role of skill -biased technological change (SBTC) in promoting the observed increase in inequality levels. In this context, labor income tax structures have been central to the policy debate. We have developed an overlapping generations model to perform a welfare evaluation of Universal basic income (UBI) tax structures and verify how these interact with SBTC. I find that an UBI system would have improved social welfare in 2010 when compared to the existing tax system and determine that this result is primarily motivated by SBTC.

Suggested Citation

  • José Coelho, 2020. "Universal basic income and skill -biased technological change," Notas Económicas, Faculty of Economics, University of Coimbra, issue 51, pages 109-132, December.
    • Handle: RePEc:gmf:journl:y:2020:i:51:p:109:132
    DOI: 10.14195/2183-203X_51_6
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    More about this item

    Keywords

    Income inequality; skill premium; optimal taxation; universal basic income.;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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