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Universal Basic Income: Some Theoretical Aspects

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  • Ghatak, Maitreesh
  • Maniquet, Francois

Abstract

In this paper, we review possible theoretical justifications of a universal basic income (UBI) scheme and also examine the determinants of its feasibility and scope. We begin by contrasting the unconditionality of UBI with the many conditions that typically accompany other welfare policies. Possible justifications for an unconditional UBI range from pure normative reasons to practical reasons due to the problem of screening beneficiaries and imperfections in institutions in charge of implementing tax and welfare policies. We also explore theoretically the conditions that determine the feasibility and size of a UBI. The broad picture that emerges from our review is that both normative and practical considerations make UBI easier to defend as a tool of poverty alleviation in poor economies than a tool to achieve social justice in rich ones.

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  • Ghatak, Maitreesh & Maniquet, Francois, 2019. "Universal Basic Income: Some Theoretical Aspects," CEPR Discussion Papers 13635, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13635
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    3. Chen, Yunmin & Chien, YiLi & Wen, Yi & Yang, C.C., 2021. "Are unconditional lump-sum transfers a good idea?," Economics Letters, Elsevier, vol. 209(C).
    4. Marco Guerrazzi, 2022. "How Long does a Generation Last? Assessing the Relationship Between Infinite and Finite Horizon Dynamic Models," Economic Papers, The Economic Society of Australia, vol. 41(1), pages 89-98, March.
    5. Ugo Colombino & Nizamul Islam, 2021. "Global and digitalised economy, new labour demand scenarios and optimal tax-transfer reforms," CHILD Working Papers Series 90 JEL Classification: H2, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    6. Nishant Yonzan & Laxman Timilsina & Inas Rashad Kelly, 2020. "Economic Incentives Surrounding Fertility: Evidence from Alaska's Permanent Fund Dividend," NBER Working Papers 26712, National Bureau of Economic Research, Inc.
    7. Andre Luduvice, 2021. "The Macroeconomic Effects of Universal Basic Income Programs," Working Papers 21-21, Federal Reserve Bank of Cleveland.
    8. Germain, Antoine, 2023. "Basic income versus fairness: redistribution with inactive agents," LIDAM Discussion Papers CORE 2023022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Fetzer, Thiemo & Shaw, Callum & Edenhofer, Jacob, 2024. "Informational Boundaries of the State," The Warwick Economics Research Paper Series (TWERPS) 1487, University of Warwick, Department of Economics.
    10. Gubello, Michele, 2024. "Social trust and the support for universal basic income," European Journal of Political Economy, Elsevier, vol. 81(C).
    11. Diego Daruich & Raquel Fernández, 2024. "Universal Basic Income: A Dynamic Assessment," American Economic Review, American Economic Association, vol. 114(1), pages 38-88, January.
    12. Amir, Rabah & FitzRoy, Felix & Jin, Jim, 2024. "A modest basic income can benefit a poor majority," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 537-547.
    13. Yonzan, Nishant & Timilsina, Laxman & Kelly, Inas Rashad, 2024. "Economic incentives surrounding fertility: Evidence from Alaska’s permanent fund dividend," Economics & Human Biology, Elsevier, vol. 52(C).
    14. Verena Löffler, 2021. "Questioning the feasibility and justice of basic income accounting for migration," Politics, Philosophy & Economics, , vol. 20(3), pages 273-314, August.
    15. Mookherjee, Dilip & Napel, Stefan, 2021. "Welfare rationales for conditionality of cash transfers," Journal of Development Economics, Elsevier, vol. 151(C).
    16. Colombino, Ugo & Islam, Nizamul, 2022. "The "Robot Economy" and Optimal Tax-Transfer Reforms," IZA Discussion Papers 15198, Institute of Labor Economics (IZA).
    17. Kurita, Kenichi, 2021. "Comparative institutional analysis of poverty-alleviation systems: Does basic income improve social welfare?," MPRA Paper 107177, University Library of Munich, Germany.
    18. Thomas Klikauer, 2023. "Book Review: Re-Union – How Bold Labor Reforms Can Repair, Revitalize, and Reunite the United States," Transfer: European Review of Labour and Research, , vol. 29(1), pages 157-160, February.
    19. Franke, Marcel, 2022. "Transfer in a conflict model as a reason for (unconditional) basic income," FRIBIS Discussion Paper Series 03-2022, University of Freiburg, Freiburg Institute for Basic Income Studies (FRIBIS).
    20. Ugo Colombino & Nizamul Islam, 2022. "The “Robot Economy†and optimal tax-transfer reforms," CHILD Working Papers Series 101 JEL Classification: H, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    21. Ghatak, Maitreesh & Jaravel, Xavier, 2020. "Is funding a large universal basic income feasible? A quantitative analysis of UBI with endogenous labour supply," LSE Research Online Documents on Economics 108533, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Universal basic income; Unconditional cash transfers; Welfare policies; Labour supply;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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