Universal Basic Income in the US and Advanced Countries
We discuss the potential role of Universal Basic Incomes (UBIs) in advanced countries. A feature of advanced economies that distinguishes them from developing countries is the existence of well developed, if often incomplete, safety nets. We develop a framework for describing transfer programs, flexible enough to encompass most existing programs as well as UBIs, and use this framework to compare various UBIs to the existing constellation of programs in the United States. A UBI would direct much larger shares of transfers to childless, non-elderly, non-disabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive. We review the labor supply literature for evidence on the likely impacts of a UBI. We argue that the ongoing UBI pilot studies will do little to resolve the major outstanding questions.
This paper was invited for a Symposium on Universal Basic Income in Annual Review of Economics. We thank James Hawkins, Krista Ruffini, and Rachel Young for excellent research assistance, and Marianne Bitler, Lauren Burns-Coady, Angus Deaton, Bill Gale, Irv Garfinkel, Robert Moffitt, Austin Nichols, Paul Niehaus, and Diane Schanzenbach for helpful comments and discussions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.