Universal Basic Income: Some Theoretical Aspects

47 Pages Posted: 1 Apr 2019 Last revised: 23 Apr 2019

See all articles by Maitreesh Ghatak

Maitreesh Ghatak

London School of Economics (LSE) - Department of Economics

Francois Maniquet

Catholic University of Louvain (UCL)

Date Written: March 2019

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: Labour Supply, unconditional cash transfers, universal basic income, welfare policies

JEL Classification: D31, D63, H24, H31, I38

Suggested Citation

Ghatak, Maitreesh and Maniquet, Francois, Universal Basic Income: Some Theoretical Aspects (March 2019). CEPR Discussion Paper No. DP13635. Available at SSRN: https://ssrn.com/abstract=3363548

Maitreesh Ghatak (Contact Author)

London School of Economics (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
44 20 7852 3568 (Phone)
44 20 7955 6951 (Fax)

HOME PAGE: http://sticerd.lse.ac.uk/dps/adds/ghatak/cv-lse-sept02.pdf

Francois Maniquet

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

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