A basic income can raise employment and welfare for a majority

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    Abstract

    With growing interest in a universal basic income (BI), we provide new results for a majority to benefit from replacing (some) unemployment benefits with BI. Given any income distribution and an extensive margin, such a replacement always benefits those remaining unemployed, raises utilitarian welfare, and benefits a poor - or even a working - majority. Similar results follow with involuntary unemployment, and joint distributions of wages and costs of work. Moreover, using quasi-linear utility with intensive margins, marginal introduction of BI can still benefit a large proportion of the poor whose productivities are below the average, without raising unemployment.
    Original languageEnglish
    Place of PublicationSt Andrews
    PublisherUniversity of St Andrews
    Pages1-29
    Publication statusPublished - Jun 2015

    Publication series

    NameSchool of Economics & Finance Discussion Paper
    PublisherUniversity of St Andrews
    No.1508
    ISSN (Print)0962-4031
    ISSN (Electronic)2055-303X

    Keywords

    • Basic income
    • Unemployment benefits
    • Wefare

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