Economic effects of a Basic Income

The employment market is the mechanism by which a Basic Income would have much of its economic effect. Whereas Chapter 4 concentrated on how a Basic Income might change a worker’s relationship to employment, here the employment market is treated as an element of the economy; and whereas Chapter 4 takes a mainly empirical approach, here more theoretical methods are used. The chapter employs indifference curves to study a Basic Income’s possible employment market effects, discusses a Basic Income’s potential effects on wage levels, and asks about wage subsidy effects. Consumption theory and other economic theory will provide insights into other economic effects; the subfield of welfare economics will be explored; and how a Basic Income might relate to inflation and economic growth will be debated. (The economy’s climate efficiency will be studied in Chapter 6.) Discussion of the state of research will inspire a list of research still required.