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- Title
Universal Basic Income: A Dynamic Assessment.
- Authors
Daruich, Diego; Fernández, Raquel
- Abstract
Universal basic income (UBI) is an increasingly popular policy proposal, but there is no evidence regarding its longer-term consequences. We find that UBI generates large welfare losses in a general equilibrium model with imperfect capital markets, labor market shocks, and intergenerational linkages via skill formation and transfers. This conclusion is robust to various alternative ways of financing UBI. By using observationally equivalent models that eliminate different sources of endogenous dynamic linkages (equilibrium capital market and parental investment in child skills), we show that the latter are largely responsible for the negative welfare consequences. (JEL H24, H31, I38, J22, J24, J62)
- Subjects
BASIC income; CAPITAL market; MARKET equilibrium; LABOR market
- Publication
American Economic Review, 2024, Vol 114, Issue 1, p38
- ISSN
0002-8282
- Publication type
Article
- DOI
10.1257/aer.20221099