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

See all articles by Loek F. M. Groot

Loek F. M. Groot

Utrecht University - School of Economics

Marga Peeters

De Nederlandsche Bank

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

Groot, Loek F. M. and Peeters, Marga, A Model of Conditional and Unconditional Social Security in an Efficiency Wage Economy: The Economic Sustainability of a Basic Income (March 3, 1997). 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, Available at SSRN: https://ssrn.com/abstract=1855934

Loek F. M. Groot

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands

Marga Peeters (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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