A modest basic income can benefit a poor majority

Rabah  Amir; Felix R FitzRoy; Jim Yongtao Jin

doi:10.1016/j.jebo.2024.05.019

A modest basic income can benefit a poor majority

Rabah Amir , Felix R FitzRoy, Jim Yongtao Jin

Economics (Business School)

Research output: Contribution to journal › Article › peer-review

Abstract

Given a general utility and income distribution and positive unemployment benefits, we analyze the impact of a universal basic income (UBI) financed by an income tax and reducing unemployment benefits. With extensive margins only and identical fixed costs of work, we show that UBI can benefit a poor majority. Plausible conditions can ensure similar results with different fixed costs. With both extensive and intensive margins but identical fixed costs, a modest UBI can still benefit a poor majority provided the income weighted tax elasticity of labor supply from intensive margins is less than the non-employment rate, which is usually true.

Original language	English
Pages (from-to)	537-547
Number of pages	11
Journal	Journal of Economic Behavior and Organization
Volume	224
DOIs	https://doi.org/10.1016/j.jebo.2024.05.019
Publication status	Published - 27 Jun 2024

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

basic income
unemployment benefit
linear tax

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10.1016/j.jebo.2024.05.019

Amir_2024_JEBO_A-modest-basic-income_AAM_CCBY
Copyright © XXXX the Authors. This work has been made available online in accordance with the University of St Andrews Open Access policy. This accepted manuscript is distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. The final published version of this work is available at https://doi.org/10.1016/j.jebo.2024.05.019
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abstract = "Given a general utility and income distribution and positive unemployment benefits, we analyze the impact of a universal basic income (UBI) financed by an income tax and reducing unemployment benefits. With extensive margins only and identical fixed costs of work, we show that UBI can benefit a poor majority. Plausible conditions can ensure similar results with different fixed costs. With both extensive and intensive margins but identical fixed costs, a modest UBI can still benefit a poor majority provided the income weighted tax elasticity of labor supply from intensive margins is less than the non-employment rate, which is usually true.",

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AU - FitzRoy, Felix R

AU - Jin, Jim Yongtao

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AB - Given a general utility and income distribution and positive unemployment benefits, we analyze the impact of a universal basic income (UBI) financed by an income tax and reducing unemployment benefits. With extensive margins only and identical fixed costs of work, we show that UBI can benefit a poor majority. Plausible conditions can ensure similar results with different fixed costs. With both extensive and intensive margins but identical fixed costs, a modest UBI can still benefit a poor majority provided the income weighted tax elasticity of labor supply from intensive margins is less than the non-employment rate, which is usually true.

KW - basic income

KW - unemployment benefit

KW - linear tax

UR - https://www.scopus.com/pages/publications/85196951758

U2 - 10.1016/j.jebo.2024.05.019

DO - 10.1016/j.jebo.2024.05.019

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VL - 224

SP - 537

EP - 547

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

ER -

A modest basic income can benefit a poor majority

Abstract

UN SDGs

Keywords

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