Universal Basic Income: Inspecting the Mechanisms

23.05.2022 14:15 – 15:45

INSTITUTE OF ECONOMICS AND ECONOMETRICS SEMINAR

(Joint with Nir Jaimovich, University of Zurich, Ofer Setty, Tel Aviv University, Yaniv Yedid-Levi, Interdisciplinary Center, Herzliya)

Abstact:

We consider the aggregate and distributional impact of Universal Basic Income (UBI). We develop a model to study a wide range of UBI programs and financing schemes and to highlight the key mechanisms behind their impact. The most crucial channel is the rise in distortionary taxation (required to fund UBI) on labor force participation. Second in importance is the decline in self-insurance due to the insurance UBI provides, resulting in lower aggregate capital. Third, UBI creates a positive income effect lowering labor force participation. Alternative tax-transfer schemes mitigate the impact on labor force participation and the cost of UBI.

Lieu

Uni Mail

NEW ROOM: M 3383

Boulevard du Pont-d'Arve 40
1205 Geneva

entrée libre