Universal Basic Income: A Dynamic Assessment
Universal basic income (UBI) is an increasingly popular policy proposal but there is no evidence regarding its longer-term consequences. We study UBI in a general equilibrium model with imperfect capital markets, labor market shocks, and intergenerational linkages via skill formation and transfers. We find that UBI increases-welfare for older agents but has large-welfare losses for younger agents and future generations. A sizable share of the negative effects stem from the endogenous intergenerational linkages. Modeling automation as an increased probability of an “out-of-work” shock, the model provides insights on the changing welfare consequence of UBI in a riskier environment.
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Copy CitationDiego Daruich and Raquel Fernández, "Universal Basic Income: A Dynamic Assessment," NBER Working Paper 27351 (2020), https://doi.org/10.3386/w27351.
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Published Versions
Diego Daruich & Raquel Fernández, 2024. "Universal Basic Income: A Dynamic Assessment," American Economic Review, vol 114(1), pages 38-88. citation courtesy of