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Evaluating Universal Basic Income

Author

Listed:
  • Masaya Yasuoka

    (School of Economics, Kwansei Gakuin University)

Abstract

This paper examines the macroeconomic effects of universal basic income (UBI). Most social security benefits are provided only when certain eligibility conditions are met. By contrast, UBI provides a uniform payment to all households without imposing eligibility criteria or conditions for receipt. The results are as follows. In both the dynamic general equilibrium (DGE) model and the dynamic stochastic general equilibrium (DSGE) model, a positive UBI payment shock increases gross domestic product, and this effect persists even after the shock has dissipated. This finding suggests that UBI may have a growth-enhancing effect, primarily because it promotes capital accumulation. The results also show that the increase in gross domestic product is larger in the DSGE model than in the DGE model. This is because the presence of inflation encourages investment in real capital, thereby generating greater capital accumulation in the DSGE model than in the DGE model.

Suggested Citation

  • Masaya Yasuoka, 2026. "Evaluating Universal Basic Income," Discussion Paper Series 312, School of Economics, Kwansei Gakuin University.
    • Handle: RePEc:kgu:wpaper:312
    as

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    References listed on IDEAS

    as
    1. Hylton Hollander & Roy Havemann & Daan Steenkamp, 2024. "The macroeconomics of establishing a basic income grant in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 92(1), pages 57-68, March.
    2. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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