Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46155 
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers No. 5241
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
In a model with heterogeneous workers and both intensive and extensive margins of employment, we consider two systems of redistribution: a universal basic income, and a categorical unemployment benefit. Well-being depends on own-consumption relative to average employed workers' consumption, and concern for relativity is a parameter that affects model outcomes. While labour supply incurs positive marginal disutility, we allow negative welfare effects of unemployment. We also compare Rawlsian and utilitarian welfare in general equilibrium under the polar opposite transfer systems, with varying concern for relativity. Basic income Pareto dominates categorical benefits with moderate concern for relativity in both cases.
Subjects: 
relative income
redistribution
basic income
unemployment benefits
happiness
well-being
JEL: 
H20
D40
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.