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A Model of Conditional and Unconditional Social Security in an Efficiency Wage Economy: The Economic Sustainability of a Basic Income

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  • L. F. M. Groot
  • H. M. M. Peeters

Abstract

This article identifies the circumstances under which the introduction of a basic income in an efficiency-wage economy leads to the desirable effects of lower unemployment, nondecreasing real incomes and profits, and an increase of secondary- versus primary-sector wages. The model analyses show that a moderate basic income can be compatible with lower unemployment, higher GDP,higher real incomes for workers, lower income inequality between workers, but a lower real income for the (voluntary) unemployed.
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  • L. F. M. Groot & H. M. M. Peeters, 1997. "A Model of Conditional and Unconditional Social Security in an Efficiency Wage Economy: The Economic Sustainability of a Basic Income," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 19(4), pages 573-597, July.
    • Handle: RePEc:mes:postke:v:19:y:1997:i:4:p:573-597
    DOI: 10.1080/01603477.1997.11490129
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    References listed on IDEAS

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    1. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 543-569.
    2. Samuel Bowles & Herbert Gintis, 1990. "Contested Exchange: New Microfoundations for the Political Economy of Capitalism," Politics & Society, , vol. 18(2), pages 165-222, June.
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    Cited by:

    1. Van der Linden, Bruno, 1999. "Active Citizen's Income, Unconditional Income and Participation under Imperfect Competition: A Normative Analysis," LIDAM Discussion Papers IRES 1999023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Colombino Ugo & Narazani Edlira, 2013. "Designing a Universal Income Support Mechanism for Italy: An Exploratory Tour," Basic Income Studies, De Gruyter, vol. 8(1), pages 1-17, July.
    3. Thomas Moutos & William Scarth, 2003. "Some Macroeconomic Consequences of Basic Income and Employment Subsidies," CESifo Working Paper Series 916, CESifo.
    4. Antonio Garofalo & R. Plasman & Concetto Paolo Vinci, 2000. "Reducing Working Time In An Efficiency Wage Economy With A Dual Labour Market," Working Papers 7_2000, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    5. Van der Linden, Bruno, 1998. "Fighting unemployment without worsening povety: Basic income versus reductions of social security contributions," LIDAM Discussion Papers IRES 1999028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Oct 1999.
    6. Jayaraj D & Subramanian S, 2017. "The Iniquity of Money-Metric Poverty in India," Basic Income Studies, De Gruyter, vol. 12(1), pages 1-26, June.
    7. Siameh, Celestine O., 2020. "Universal Basic Income, Targeted Cash Transfers, and Progressive Taxation: Reducing Income Inequality in South Africa," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304571, Agricultural and Applied Economics Association.
    8. María Amparo Cruz-Saco, 2002. "A basic income policy for Peru: can it work?," Apuntes. Revista de ciencias sociales, Fondo Editorial, Universidad del Pacífico, vol. 29(51), pages 5-26.

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    More about this item

    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

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