Working Paper: CEPR ID: DP13635
Authors: Maitreesh Ghatak; Francois Maniquet
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.
Keywords: universal basic income; unconditional cash transfers; welfare policies; labour supply
JEL Codes: D31; D63; H24; H31; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| UBI (J65) | poverty alleviation (I32) |
| UBI (J65) | labor supply (J20) |
| first-best world (F01) | justification of UBI (H53) |
| second-best world (F01) | justification of UBI (H53) |