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Active citizen's income, unconditional income and participation under imperfect competition: a welfare analysis

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  • Bruno Van der Linden

Abstract

Various types of basic income schemes are considered to compensate the allocative inefficiencies induced by unemployment benefits. A dynamic general equilibrium model of a unionised economy is developed in which participation to the formal labour market is endogenous and the budget of the State has to balance. It is shown that basic income schemes reduce the equilibrium unemployment rate. Assuming that job-search is costly to monitor, the normative analysis suggests that only the active population should be eligible to the basic income. Introducing such an 'active citizen's income' can be a Pareto-improving reform. Copyright 2004, Oxford University Press.

Suggested Citation

  • Bruno Van der Linden, 2004. "Active citizen's income, unconditional income and participation under imperfect competition: a welfare analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 98-117, January.
  • Handle: RePEc:oup:oxecpp:v:56:y:2004:i:1:p:98-117
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    Cited by:

    1. Alice Fabre & Stéphane Pallage & Christian Zimmermann, 2014. "Universal Basic Income versus Unemployment Insurance," Cahiers de recherche 1427, CIRPEE.
    2. Jörg Lingens & Klaus Wälde, 2009. "Pareto-Improving Unemployment Policies," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 65(2), pages 220-245, June.
    3. Luke Haywood, 2014. "Bedingungsloses Grundeinkommen: eine ökonomische Perspektive," DIW Roundup: Politik im Fokus 33, DIW Berlin, German Institute for Economic Research.

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