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Universal Basic Income: Some Theoretical Aspects

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  • Maitreesh Ghatak
  • François Maniquet

Abstract

In this article, we review the desirability and feasibility of a universal basic income (UBI) scheme from the theoretical point of view. We first discuss the possible theoretical justifications of UBI, contrasting the unconditionality of UBI with the many conditions that typically accompany other welfare policies. These justifications 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. Next, we explore 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 developing countries than as a tool to achieve social justice in developed ones.

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  • Maitreesh Ghatak & François Maniquet, 2019. "Universal Basic Income: Some Theoretical Aspects," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 895-928, August.
    • Handle: RePEc:anr:reveco:v:11:y:2019:p:895-928
    DOI: 10.1146/annurev-economics-080218-030220
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    Cited by:

    1. Diego Daruich & Raquel Fernández, 2020. "Universal Basic Income: A Dynamic Assessment," NBER Working Papers 27351, National Bureau of Economic Research, Inc.
    2. Kurita, Kenichi, 2021. "Comparative institutional analysis of poverty-alleviation systems: Does basic income improve social welfare?," MPRA Paper 107177, University Library of Munich, Germany.
    3. Nicholas Crafts, 2022. "The 15‐Hour Week: Keynes's Prediction Revisited," Economica, London School of Economics and Political Science, vol. 89(356), pages 815-829, October.
    4. Thomas Klikauer, 2023. "Book Review: Re-Union – How Bold Labor Reforms Can Repair, Revitalize, and Reunite the United States," Transfer: European Review of Labour and Research, , vol. 29(1), pages 157-160, February.
    5. Thiemo Fetzer & Callum Shaw & Jacob Edenhofer, 2024. "Informational Boundaries of the State," CESifo Working Paper Series 10901, CESifo.
    6. Chen, Yunmin & Chien, YiLi & Wen, Yi & Yang, C.C., 2021. "Are unconditional lump-sum transfers a good idea?," Economics Letters, Elsevier, vol. 209(C).
    7. Marco Guerrazzi, 2022. "How Long does a Generation Last? Assessing the Relationship Between Infinite and Finite Horizon Dynamic Models," Economic Papers, The Economic Society of Australia, vol. 41(1), pages 89-98, March.
    8. Franke, Marcel, 2022. "Transfer in a conflict model as a reason for (unconditional) basic income," FRIBIS Discussion Paper Series 03-2022, University of Freiburg, Freiburg Institute for Basic Income Studies (FRIBIS).
    9. Ugo Colombino & Nizamul Islam, 2021. "Global and digitalised economy, new labour demand scenarios and optimal tax-transfer reforms," CHILD Working Papers Series 90 JEL Classification: H2, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    10. Fetzer, Thiemo & Shaw, Callum & Edenhofer, Jacob, 2024. "Informational Boundaries of the State," The Warwick Economics Research Paper Series (TWERPS) 1487, University of Warwick, Department of Economics.
    11. Nishant Yonzan & Laxman Timilsina & Inas Rashad Kelly, 2020. "Economic Incentives Surrounding Fertility: Evidence from Alaska's Permanent Fund Dividend," NBER Working Papers 26712, National Bureau of Economic Research, Inc.
    12. Fetzer, Thiemo & Shaw, Callum & Edenhofer, Jacob, 2024. "Informational Boundaries of the State," CAGE Online Working Paper Series 697, Competitive Advantage in the Global Economy (CAGE).
    13. Andre Luduvice, 2021. "The Macroeconomic Effects of Universal Basic Income Programs," Working Papers 21-21, Federal Reserve Bank of Cleveland.
    14. Thiemo Fetzer & Callum Shaw & Jacob Edenhofer, 2024. "Informational Boundaries of the State," ECONtribute Discussion Papers Series 282, University of Bonn and University of Cologne, Germany.
    15. Ugo Colombino & Nizamul Islam, 2022. "The “Robot Economy†and optimal tax-transfer reforms," CHILD Working Papers Series 101 JEL Classification: H, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    16. Germain, Antoine, 2023. "Basic income versus fairness: redistribution with inactive agents," LIDAM Discussion Papers CORE 2023022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Verena Löffler, 2021. "Questioning the feasibility and justice of basic income accounting for migration," Politics, Philosophy & Economics, , vol. 20(3), pages 273-314, August.
    18. Colombino, Ugo & Islam, Nizamul, 2022. "The "Robot Economy" and Optimal Tax-Transfer Reforms," IZA Discussion Papers 15198, Institute of Labor Economics (IZA).
    19. Mookherjee, Dilip & Napel, Stefan, 2021. "Welfare rationales for conditionality of cash transfers," Journal of Development Economics, Elsevier, vol. 151(C).
    20. Ghatak, Maitreesh & Jaravel, Xavier, 2020. "Is funding a large universal basic income feasible? A quantitative analysis of UBI with endogenous labour supply," LSE Research Online Documents on Economics 108533, London School of Economics and Political Science, LSE Library.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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