A Model of Conditional and Unconditional Social Security in an Efficiency Wage Economy: The Economic Sustainability of a Basic Income
Journal of Post-Keynesian Economics, Vol. 19, No. 4, pp. 573-597, 1997
BASIC INCOME, UNEMPLOYMENT AND COMPENSATORY JUSTICE, Loek Groot, ed., Utrecht University, 1997
25 Pages Posted: 3 Jun 2011 Last revised: 30 May 2014
Date Written: March 3, 1997
Abstract
This article identifies the circumstances under which the introduction of a basic income in an efficiency-wage economy leads to the desirable effects of lower unemployment, nondecreasing real incomes and profits, and an increase of secondary- versus primary-sector wages. The model analyses show that a moderate basic income can be compatible with lower unemployment, higher GDP,higher real incomes for workers, lower income inequality between workers, but a lower real income for the (voluntary) unemployed.
Keywords: basic income, unemployment, efficiency wage
JEL Classification: E24
Suggested Citation: Suggested Citation